Gold & Silver Prices Swing Wildly on Monday! Four Key Factors to Watch: What's Next for the Trend?
Last week will go down as one of the most extreme periods in precious metals history: gold broke $5,000/oz for the first time and soared to an intraday high of $5,598 early Thursday. Then the market reversed violently. By Friday, gold plunged below $4,700/oz, erasing weeks of gains in just hours.
The extreme volatility continued Monday: spot gold briefly fell below $4,700 early in the session (-3.3% intraday), then rallied quickly to trim losses to around 1%, but by press time had widened again to -4.3%.
Spot silver was even more dramatic: early plunge over 10% to below $75/oz, followed by a rapid intraday reversal to above $87 (+3% at one point), but by press time had plunged again (-4%+ intraday).
Panic spilled into equities. On Monday in A-shares, more than a dozen gold stocks — Zhaojin Gold, Sichuan Gold, Hunan Gold, Zhongjin Gold, Chifeng Gold, Western Gold, Shandong Gold — hit limit-down at open. In Hong Kong, gold names led declines, with China Gold International down over 7% at press time.
The violent swings in gold and silver signal ongoing fierce battles between bulls and bears. So where do precious metals go from here? Wall Street analysts remain clouded in uncertainty. Here are the four biggest factors investors need to watch:
1. Kevin Warsh’s Confirmation Hearing Testimony
The first major focus: the formal stance from Trump’s nominee for next Fed Chair, Kevin Warsh.
Friday’s nomination triggered the precious-metals selloff. But market interpretation of Warsh’s policy views remains unclear.
While he has publicly supported rate cuts in recent months, traders still see him as a “closet hawk.” This view drove Friday’s dollar and Treasury yield surge, fueling the gold dump.
Reality may be more nuanced — his recent statements hint at a policy shift. Investors need his official position, and the Senate Banking Committee confirmation hearing will be key.
No exact date has been set, but with Powell’s term ending May 15, hearings are likely in mid-to-late February or March to allow time for review and full Senate vote.
2. U.S. Economic Data
Warsh is just one FOMC member — not the sole decision-maker. Fed policy will ultimately depend on incoming data.
U.S. data currently shows conflicting signals: inflation pressure vs. softening employment. Disappointing numbers could quickly shift sentiment.
Friday’s hotter-than-expected PPI (+3.0% YoY vs. +2.8% expected) helped fuel the dollar/yield rise and gold selloff.
This Friday’s nonfarm payrolls report is the next big catalyst: weak jobs data could reverse dollar strength and spark renewed gold buying.
3. Geopolitical Risks
Early-2026 gold/silver strength was driven by escalating geopolitical tensions: U.S. military action in Venezuela (capturing President Maduro and seizing oil revenues), Greenland sovereignty disputes, etc., fueling safe-haven flows.
Trump’s Iran warning last week was notable: on January 28, he posted that a large fleet is heading to Iran and ready to act swiftly, urging Tehran to negotiate on nuclear issues.
On February 1 local time, Trump said at Mar-a-Lago he hopes for a deal but warned that if Iran refuses a nuclear agreement, “we’ll see” about U.S. military action and potential regional war.
Earlier that day, Iran’s Foreign Minister Araghchi said Iran remains “confident” in reaching a nuclear deal with the U.S., noting productive back-channel talks via friendly regional countries.
The trajectory of U.S.–Iran negotiations could continue to sway precious-metals markets.
4. Physical Demand
Despite shifting market dynamics, physical demand remains robust.
In India, ahead of the February 1 federal budget and potential tariff changes, gold premiums spiked to $121/oz — the highest since 2014.
With Lunar New Year approaching in China, jewelry and investment demand could rebound, keeping premiums elevated.
Amid these mixed factors, precious metals’ path ahead remains foggy. Citi’s assessment captures the uncertainty: geopolitical and economic risks still support gold allocation.
However, Citi warns that roughly half of gold’s current risk premium could vanish in late 2026 — especially if Fed political independence strengthens. That scenario could weigh on gold’s medium-term outlook.