Gold, silver and copper tumble as nervous investors discover gravity

FE Team | Published: January 30, 2026 22:08:25

LONDON, Jan 30 (Reuters): Gold, silver and copper prices tumbled on Friday after hitting record highs this week, as jittery investors moved to lock in profits with hopes for aggressive US interest rate cuts starting to fade and the dollar steadying.
President Donald Trump on Friday said he had chosen former Federal Reserve Governor Kevin Warsh to head the US Federal Reserve. The dollar index, a measure of the US currency against peers had firmed on expectation of Warsh's appointment.
"The market thinks Kevin Warsh is rational and that he won't push aggressively for rate cuts," said Panmure Liberum analyst Tom Price. "Generalist investors who have different agendas - like protecting capital - are taking profits."
A higher US currency makes dollar-priced metals more expensive for holders of other currencies, which could hit demand. This relationship is used by funds which trade using buy and sell signals from numerical models.
With gold and silver prices up 17 per cent and 39 per cent respectively so far in January, profit-taking on the last trading session of the month came after several days of thin liquidity where small flows driven by the fear of missing out triggered outsized moves.
"Both gold and silver were ripe for a correction given the highly speculative and unhinged nature of the latest surge," said Ole Hansen, head of commodity strategy at Saxo Bank.
Gold was down 4.7 per cent at $5,143.40 an ounce at 1201 GMT and silver had lost 11 per cent to $103.40 after hitting records at $5,594.80 and $121.60 an ounce respectively on Thursday.
"Precious metals have discovered gravity," said independent analyst Ross Norman. "It's brutal, but speculators have been reminded these are two-way markets."
Copper, which touched an all-time high at $14,527.50 a metric ton on Thursday, was down 1.1 per cent at $13,465. It has gained around 6 per cent so far this month after climbing 11 per cent in December.
"Prices are likely to remain high and volatile as funds continue to flow into this relatively small, and now very crowded market," said Macquarie analyst Alice Fox.
Traders expect further losses for copper, aluminium and other industrial metals listed on exchanges ahead of the Lunar New Year holiday on February 16, when top metals consumer China will shut down for a week.
"Chinese punters will not want to have any positions in these volatile markets," said Panmure's Price. "Look at what has happened in just 12 hours."