Just as a massive wave of retail investors began swarming into the market, the overheated trading frenzy surrounding the hottest metal and mining stocks rapidly collapsed. However, according to a senior strategist team at Barclays, last Friday's sell-off in the most popular precious metals and mining stocks also dragged down industrial metals with solid fundamental support, potentially creating a "crucial mispriced dip-buying entry point." The catalysts are more fundamentally driven bullish factors such as AI infrastructure construction and global government fiscal expansion. Statistics show that the iShares Silver ETF recorded its largest single-day drop since its 2006 debut last Friday, while the NYSE Arca Gold Miners Index posted its steepest decline since 2008.
The increasing large-scale participation of retail investors in precious metals trading could trigger more violent commodity and stock volatility, some market observers noted, suggesting it "will only create larger swings" and could rapidly drive prices up or down. The precious metals plunge continued into Monday, with gold prices falling as much as 10% at one point. Silver prices plummeted up to 16% before paring some losses.
Last Friday, gold, silver, and copper prices fell sharply, partly triggered by a rebound in the US dollar following Donald Trump's nomination of the long-standing hawk Kevin Warsh for Federal Reserve Chair. This暴跌 ended a previous fierce rally that had pushed silver and gold prices to repeated record highs. Just one day before the crash, data from Vanda Research, which focuses on retail fund flows, showed that the stock market's YOLO crowd—represented by retail investors—poured a net $171 million into the iShares Silver ETF (SLV.US). This marked the largest single-day net inflow from retail investors on record.
The fund suffered its biggest drop since its inception in 2006 last Friday; meanwhile, the NYSE Arca Gold Miners Index recorded its steepest decline since 2008. Within the S&P 500, the materials sector, focused on metals and gold mining, was the weakest performer. Current market concerns lie with the possibility that an increasingly involved YOLO crowd—individual investors chasing quick short-term gains, who may have fickle investment stances—could stimulate even more dramatic market volatility.
"YOLO"—an aggressive investment group whose motto is "You Only Live Once"—enthusiastically employs a "gambling-like" approach, going all-in or buying high-leverage options to bet on a single hot stock or ETF. Why did this metals mania sweep the globe so quickly? Also benefiting from the YOLO crowd's extremely bullish enthusiasm for precious metals, industrial metals, and mining-related stocks/ETF assets, their unprecedented scale of capital inflow into metal and mining stocks has caused some previously obscure metal and mining stock names to appear on retail investors' favorite investment lists—lists long dominated by US tech giants like Nvidia, Google, Tesla, Broadcom, and Micron.
Statistics based on global stock market closes as of January 27 show that the MSCI Metals and Mining Index has risen nearly 90% so far in 2025, significantly outperforming the MSCI Semiconductors Index (which includes chip giants like Nvidia and TSMC), the global banking index, and the benchmark index for the US market's "Magnificent Seven" (Apple, Microsoft, Google, Tesla, Amazon, Nvidia, and Meta). This upward trend shows no signs of slowing, as booming developments in humanoid robots, electric vehicles, and AI data centers continue to push metal prices higher.
YOLO funds swarmed in, with the silver ETF rally surpassing even Nvidia's. "When a trade moves from being a portfolio ballast into meme-stock territory, market volatility increases significantly," said Dave Mazza, CEO of Roundhill Investments. "Almost everyone goes all-in very quickly, so when sentiment shifts, everyone acts at the same time, creating a negative and powerful series of feedback loops." As the chart shows, the fervent capital inflow into the silver ETF was comparable to that seen for the world's highest-market-cap company—Nvidia (NVDA.US).
US President Donald Trump's nomination of Kevin Warsh as the next Fed Chair—viewed by the market as a relatively hawkish choice—served as a key catalyst for Friday's market shift. On Friday, the US dollar recorded its largest gain since May, gold prices ultimately fell 9%, and silver dropped over 20%. Dollar-denominated precious metals had surged significantly in recent weeks: a period of substantial dollar weakness, heightened geopolitical tensions, and rising industrial demand for silver from the tech sector collectively boosted their appeal.
Furthermore, the stalling performance of some major tech stocks this year is partly because retail speculative funds have set their sights on the "metal/mining stock investment frenzy," further fueling the popular momentum trading theme in global equity markets. In a key signal of substantially increased retail speculative participation: over the five trading days ending January 27, the silver ETF was the 5th most active trading symbol on the Interactive Brokers platform in both stocks and options, with activity roughly double that of the previous week.
By Friday, SLV had become the 2nd most active trading symbol globally, according to Steve Sosnick, Chief Strategist at Interactive Brokers. Christopher Harvey, Head of Equity and Portfolio Strategy at CIBC Capital Markets, stated that the YOLO crowd's participation in gold and metal-related hot trades "will only create more volatility." "This will drive some retail investors crazy and make others very happy."
In a report dated January 29, equity strategist Steven DeSanctis from Wall Street giant Jefferies noted a "significant and rare change" in his firm's basket of retail investors' favorite stocks: eight stocks from the metals and mining sector made the list, whereas retail favorites have long been dominated by tech giants.
Do industrial metal-related stocks present a dip-buying opportunity? Areas where YOLO funds are heavily concentrated—especially sentiment-driven and leveraged vehicles like silver ETFs/precious metal mining stocks—are most prone to sharp, clearing-style declines when sentiment reverses; conversely, parts of the market that get dragged down but have lower crowding and clearer fundamental catalysts—such as certain industrial metal chains—might be more "tradable," and such large-scale sell-offs could create positive dip-buying opportunities.
Alexander Altmann from Barclays Plc believes Friday's sell-off provided a genuine dip-entry opportunity—to buy industrial metal-type stocks caught up in the market turmoil. Barclays stated that catalysts for this sector include the vigorous progress of AI infrastructure construction and fiscal stimulus and expansion policies by various governments, factors that could drive prices of industrial metals like copper and aluminum higher.
Barclays' data shows the Bloomberg Industrial Metals Subindex (BCOMIN Index) has risen about 30% from recent lows; across multiple waves of metal investment mania since the 1990s, the average gain from trough to peak has been approximately 170%. "I believe this spillover effect, impacting the broader metals trading theme, is a gift—it's a pullback worth 'stepping into' for buying opportunities," said Altmann, the bank's Global Head of Equity Tactical Strategy. "Importantly, industrial metal stocks have underperformed the long-term share prices of precious metal-related companies—while retail investors are mostly crowded into precious metal companies, making this industrial metals trade particularly interesting," Altmann added.
On the industrial side, the strength in key metals like copper resembles a new demand curve driven by "AI and electrification": a report from S&P Global Research indicates that new demand vectors like AI and defense will push global copper demand up by approximately 50% by 2040; if recycling and new mine development cannot keep pace, the copper supply gap will widen significantly. This is also why the research institution previously identified "gold, silver, copper, tin, etc., all hitting new highs" as one of the core asset narratives for the beginning of 2026 back in mid-January.
When the market becomes convinced that "copper is not just a cyclical commodity, but also the most fundamental production factor for AI data centers, power transmission and distribution, energy storage, and electric vehicle chains, as well as a strategic resource essential for economic self-reliance amid geopolitical turmoil," even established mining giants can be repriced from "value/cyclical stocks" into resource infrastructure growth stocks with stronger cash flow certainty. This repricing often manifests first in leading companies' market capitalizations. For instance, the significant rise in BHP Group's market cap and weighting helped the Australian—and global—mining giant dethrone the Commonwealth Bank of Australia as the country's highest-valued listed company, with BHP reclaiming the title of "Australia's stock king."
For Wall Street, copper's positioning extends beyond being an industrial metal; it acts as a thermometer for global economic growth and AI capital expenditure expectations. The market's renewed embrace of "risk assets" at the start of the year, combined with the narrative around power, cabling, equipment, and supporting infrastructure required for AI data center construction, has further amplified aggressive allocation impulses. Even amidst interim volatility, the AI investment theme provides an emotional foundation for copper prices.
In the era of global artificial intelligence and digital transformation, the construction of ultra-large data centers like "Stargate" is leading to explosive growth in copper demand. The large AI data centers being aggressively built by Microsoft, Google, Amazon, and Meta (Facebook's parent company) are highly dependent on copper for power transmission, AI computing cluster high-speed copper cable interconnection systems, cooling systems, high-performance network equipment, and data center storage equipment. This structural new demand is gradually becoming a new growth engine for the copper market.
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