Gold, silver, and global stock markets continued their sharp decline on Monday, as the assets that performed most strongly in January faced intense selling pressure, with the panic from Friday's dramatic market reversal continuing to spread. This comprehensive sell-off, spanning precious metals, tech stocks, and cryptocurrencies, is severely testing investor confidence in the previously sustained upward trend. The immediate triggers for the market volatility were sharp swings in precious metals and growing concerns over tech stock valuations. NVIDIA CEO Jensen Huang's statement that the company's proposed $1 trillion investment in OpenAI was "never a commitment" intensified market doubts about the sustainability of the AI investment boom. Concurrently, former President Trump's nomination of Kevin Warsh as the next Federal Reserve Chair on Friday prompted investors to reassess monetary policy expectations. Spot gold fell below $4,550 per ounce on Monday, its first time since January 16, retreating over $330 from its intraday high. Spot silver dropped below $74 per ounce, marking a daily decline of 13.01%. Asian stock markets recorded their worst two-day drop since early April, while European stocks and U.S. stock futures pointed to further losses. Nick Twidale, Chief Market Analyst at AT Global Markets, commented, "The massive volatility in the metals market is the real catalyst. When we witness historic moves of this magnitude, investor confidence plummets not just for gold, but for the entire market."
S&P 500 index futures saw their intraday losses widen to 1%. Nasdaq 100 index futures fell more than 1%. South Korea's KOSPI index plunged 5% during the session. Shares of Samsung and SK Hynix declined. Australia's S&P/ASX 200 index dropped 1%. Vietnam's VN Index saw its intraday losses expand to 1%. Indonesia's benchmark stock index tumbled 5%. The Indian Rupee strengthened against the U.S. dollar, with gains widening to 0.5%, leading advances among Asian currencies. The yield on the 10-year U.S. Treasury note remained largely unchanged at 4.23%. Spot gold broke below $4,580 per ounce, down 6.27% for the day. New York gold futures retreated below $4,600 per ounce, falling 3.07%. Spot silver fell below $74 per ounce, recording a steep intraday decline of 13.01%. WTI crude oil saw its losses expand to 5%. Bitcoin briefly fell below $75,000.
A sell-off wave, triggered by concerns over technology stock valuations, has taken hold. Technology stocks suffered heavy losses amid heightened uncertainty regarding the AI investment outlook. The MSCI Asia Tech Index recorded its largest drop since November, while South Korea's KOSPI index, a key barometer for the AI sector, plunged 4%, and Nasdaq 100 index futures fell more than 1%.
NVIDIA's comments acted as a catalyst for the tech stock sell-off. NVIDIA's ambitious $1 trillion investment plan for OpenAI has reportedly "stalled," partly due to internal concerns about the future competitive position of the ChatGPT developer. Over the weekend, Jensen Huang stated the company still plans "significant investment" in OpenAI, but when questioned if the amount would exceed $1 trillion, he responded:
"No, no, not at all like that."
Gary Tan, Portfolio Manager at Allspring Global Investments, noted, "Huang's comments could impact short-term sentiment, particularly for AI-related stocks that have seen strong rallies. These remarks primarily served as a catalyst for profit-taking; we are witnessing the unwinding of some crowded trades in the market." NVIDIA had prominently announced its investment plan for OpenAI last September, with its stock rising 4% that day. However, the company's November earnings filing indicated that the $1 trillion figure was not a firm commitment, disclosing that it "cannot guarantee that we will enter into a definitive agreement regarding the OpenAI opportunity or any other potential investment."
A historic plunge in precious metals has rattled the market. Monday's market turmoil was epitomized by extreme volatility in precious metals. Spot gold broke below $4,580 per ounce, down 6.27% for the day, a significant retreat from its peak near $5,600 reached in January. New York gold futures fell below $4,600 per ounce, declining 3.07%.
Silver's single-day drop reached 12%, following Friday's record 26% plunge, resulting in a cumulative loss of over one-third across just two trading sessions.
Over the past year, precious metal prices had surged to historic highs that stunned veteran traders. The rally accelerated sharply in January, as investors flocked to gold and silver, betting on geopolitical turmoil, currency debasement, and threats to Federal Reserve independence. Substantive buying from Chinese speculators added a frothy component to the upswing. Bloomberg strategist Garfield Reynolds observed that the selling is accelerating, with Asian traders seemingly eager to offload assets in anticipation of further declines in metals and stocks during the London trading session. A cascade of declines across assets—from gold to the South Korean KOSPI, WTI crude, and Nasdaq 100 futures—is creating a self-reinforcing trend. Crude oil prices also tumbled 6.3%, yet market attention remained focused primarily on gold and silver. The MSCI World Index fell 0.4%, while the Asian benchmark index dropped 2%. A personnel change at the Federal Reserve has added to policy uncertainty. Former President Trump's Friday nomination of Kevin Warsh as the next Fed Chair has abruptly shifted the debate surrounding monetary policy direction. Warsh, an economist known for his sharp criticism of the central bank and his monetary policy views, would succeed Jerome Powell in May if confirmed by the Senate. Market focus has rapidly shifted from short-term interest rates to the Fed's $6.6 trillion balance sheet and its fundamental role in the markets. The 55-year-old Warsh aligned with Trump in 2025 by publicly advocating for rate cuts, a stance seemingly at odds with his long-standing reputation as an inflation hawk. Trump stated on Friday that he did not ask Warsh to commit to lowering rates. Francis Tan, Chief Asia Strategist at Indosuez, stated:
"Investors are worried about 'higher-for-longer' rates. However, the market's confusion lies in whether Trump will exert pressure through Warsh to send more dovish signals to the market. This is leading to heightened volatility across asset classes and regions."
Bitcoin briefly fell below $75,000, while the U.S. Dollar Index held onto Friday's gains as risk sentiment deteriorated broadly. On the political front, the U.S. government entered a partial shutdown on Saturday, awaiting House approval of a funding deal negotiated by Trump with Democrats following nationwide protests triggered by the killing of a U.S. citizen by a Border Patrol agent in Minneapolis. Billy Leung, Investment Strategist at Global X Management, commented:
"Market sentiment has turned defensive, but this is primarily about risk reduction, not panic. The overall mood is weak."
Comments