Gold Plunged Over 4%, Silver Crashed 11%, Did the US Stock Market Plunge Trigger Algorithmic Selling in Precious Metals?
Gold and silver prices plummeted sharply on Thursday, with gold dropping over 4% and silver plunging nearly 11%, amid a broader sell-off in metals triggered by a significant decline in U.S. equities. The Nasdaq fell more than 2%, prompting some traders to liquidate commodity positions—including gold, silver, copper, platinum, and palladium—to cover losses in equities and seek liquidity. A strong dollar and risk-off sentiment contributed to the decline.
The sharp and sudden downturn was largely attributed to algorithmic and momentum-driven trading. After a period of sustained gains, metals faced heavy selling pressure as key technical levels were breached, leading to automated sell orders. Some analysts characterized the move as a "vacuum-style drop," typical of systematic trading strategies during periods of market stress.
Despite the sell-off, many analysts remain bullish on gold’s longer-term prospects, citing ongoing geopolitical risks, questions around Federal Reserve policy, and a broader shift away from traditional assets. Major banks, including J.P. Morgan and Deutsche Bank, maintain positive year-end targets.
Market participants are now closely watching upcoming U.S. economic data, particularly the CPI release, for clues on the Fed’s interest rate path, as lower rates generally support non-yielding assets like precious metals.
marsbit02/13 02:57
