Gold and silver prices have continued to tumble, deepening a remarkable reversal of a surge that propelled precious metals to new highs. Prices touched fresh high in January as investors stored money in so-called “safe haven” assets owing to geopolitical uncertainty, but metals prices plummeted when Kevin Warsh was chosen to chair the US Federal Reserve.
Spot gold on Friday had its largest one-day slump since 1983 with a fall of more than 9%, while silver fell 27% before recovering marginally on Monday. While the dollar moved up, the FTSE 100 fought off a sluggish start to make new highs, closing up 1.2% at 10,341.56 points, a record close, and a new intra-day high of 10,345.48.
Analysts also cited modifications to a major exchange’s trading regulations, which increased the cost of trading for speculators and put additional pressure on prices. Many investors acquired gold and silver as insurance against the turbulent geopolitical backdrop, although they’ve learnt the hard way these assets can also be volatile themselves,” said Russ Mould, investment director at AJ Bell.
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