Precious metals suffered a sharp reversal on Friday, led by an extreme move in silver. After climbing to a fresh record of $120 per ounce earlier in the session, silver fell back to $75 in U.S. afternoon trading, leaving it down 35% on the day. Gold also retreated hard, sliding to $4,718 after touching $5,600 on Thursday, a daily decline of 12%.
The sell-off was not limited to those two metals. Platinum dropped 24% and palladium lost 20%. In silver’s case, the reversal erased nearly all of its massive January advance within a matter of hours. The report noted that this kind of downside volatility is rare in precious metals trading.
Stocks weaken as bitcoin steadies above recent lows
U.S. equities also moved lower, with the Nasdaq down 1.25% and the S&P 500 off 0.9%. Crypto prices, by contrast, were relatively stable on Friday after earlier weakness in the week. Bitcoin traded around $83,000, holding above Thursday evening’s panic low and staying above its overnight bottom near $81,000.
Markets have been volatile throughout the week. This latest swing was linked in the report to President Trump’s decision to pick Kevin Warsh to replace Jerome Powell as Federal Reserve chair. Current market thinking described Warsh as a relatively hawkish choice, a factor that may have contributed to selling across risk assets.
Crypto traders watch whether capital rotates back from commodities
Paul Howard, director at trading firm Wincent, said the parabolic rise in commodities over recent months had drawn risk capital away from crypto markets. In his view, cryptocurrency markets had been hurt by that flow into what remained a popular commodities trade, and that pattern may now be starting to shift.
Howard also pointed to growing demand for upside exposure in the options market during February. He said the 105,000 BTC call options were among the most actively traded contracts. That, he argued, reflects a view shared by many crypto traders: their market may be overdue for a catch-up move after commodities led for months.
On the Warsh nomination, Howard said what had been expected to support markets instead coincided with a broad risk sell-off. He described the reaction as closer to a knee-jerk move while markets recalibrate.