Market Turbulence Hits Havens: Precious Metals Plunge, Bitcoin Stumbles as February Opens
February trading opened with a jolt as traditional safe havens and speculative assets alike faced a brutal sell-off, injecting fresh volatility into global markets and testing investor nerves.
Gold and silver, which had been on a tear this year, suffered their most significant single-day drops in months on Friday. Gold futures plummeted 11% from a mid-week record above $5,550 per troy ounce, while silver cratered 31%. The metals pared some losses early Monday but remained sharply lower, with gold trading around $4,740 after briefly touching $4,423. Analysts pointed to a rapid unwinding of speculative positions that had built up during the metals' parabolic rise, fueled in part by retail investor enthusiasm and strong demand from Chinese markets.
"The speed of the correction was a stark reminder that even perceived safe havens are not immune to manias," said Ole Hansen, head of commodity strategy at Saxo Bank. "When discussions about gold and silver move from trading desks to dinner tables, it often signals a rally is nearing exhaustion."
Meanwhile, Bitcoin, often dubbed 'digital gold,' tumbled over the weekend, falling from above $83,000 to as low as $74,570—its lowest level since April. The cryptocurrency is now down sharply from its October 2025 peak above $126,000, struggling to find footing amid broader risk aversion.
The turbulence spread to Asia, where South Korea's benchmark Kospi index sank 5.26% on Monday, its worst daily performance since April. The sell-off was attributed to growing investor anxiety over the profitability and sustainability of massive corporate spending on artificial intelligence, a theme that also looms over the ongoing U.S. earnings season for major tech firms.
In a note to clients, Deutsche Bank's global head of macro research, Jim Reid, characterized the precious metals run-up as having "an enormous speculative element." This view was echoed by Matt Maley of Miller Tabak + Co., who noted that "serious froth and leverage" had entered the asset class, attracting momentum-driven investors.
The shift in sentiment coincided with former President Donald Trump's announcement nominating Kevin Warsh as Federal Reserve Chair, a move that added a new layer of policy uncertainty for markets to digest. The U.S. dollar index, stabilizing after a recent slide, posted its best day since June on Friday.
Despite the sharp pullback, some institutions remain bullish on the long-term trajectory. Deutsche Bank reiterated its year-end target of $6,000 per ounce for gold, citing a structural, multi-year trend of diversification away from dollar-denominated assets by institutional investors.
As markets recalibrate, focus turns to a packed week of corporate earnings—including reports from tech giants Alphabet and Amazon—and key economic data like the January jobs report. Investors will also scrutinize commentary from Fed Chair nominee Warsh during his upcoming confirmation hearings.
Market Voices:
"This was a classic bubble pop. The retail crowd piled into gold and silver like meme stocks, and now they're getting burned. It's a painful but necessary reset for markets that had lost touch with fundamentals." — Marcus Thorne, a portfolio manager based in Chicago, expressing a sharp, critical view.
"The volatility is concerning, but the long-term drivers for gold—geopolitical risk, diversification—haven't changed. This looks like a healthy correction in a longer bull market, not a breakdown." — Priya Sharma, a senior analyst at a London-based wealth firm.
"It's a wake-up call to check your portfolio's balance. When both 'safe' metals and crypto fall together, it tells you that diversification needs to be deeper than just across different risky assets." — David Chen, an independent financial advisor in Singapore.
"The AI-driven sell-off in Korea is overdone. We're in the early innings of a transformative technology cycle. Short-term nerves are creating a buying opportunity for patient investors." — Elena Rodriguez, a tech sector strategist in New York.