Slump in commodities rattles global markets
Summary
Commodities markets plunged significantly led by sharp declines in gold, silver, oil, and industrial metals following the appointment of Kevin Warsh as the next Fed chair, triggering risk-asset selloffs and a stronger US dollar.
Key Points
- Gold prices dropped 9% to their lowest in more than two weeks, with silver falling over 13% after recent record highs.
- Kevin Warsh's nomination as the next Federal Reserve chair triggered widespread selling in both stock and commodity markets, strengthening the US dollar.
- Precious metals futures saw accelerated selling after the CME Group increased margin requirements, negatively impacting liquidity and speculative trading.
- Energy prices eased due to signs of de-escalation in US-Iran tensions, while industrial metals faced pressure from high inventories and weak demand before China's Lunar New Year.
