The global metals market experienced a broad sell-off on May 15, entering a phase of volatility and risk repricing.
From the Asian morning session through European and American trading hours, precious and industrial metals collectively tumbled. On China's commodity futures market, gold and silver prices fell sharply. The main silver futures contract on the Shanghai Futures Exchange (SHFE) plunged 11.05% to close at 19,199 yuan per kilogram, while the main gold futures contract dropped 2.28% to 1,004.38 yuan per gram, erasing all gains made during the week. Platinum fell over 6%, and palladium declined more than 5%. The non-ferrous metals sector was not spared, with SHFE contracts for tin, copper, nickel, and aluminum all closing lower.
Overseas markets followed suit. Spot gold fell over 2% at one point, and COMEX silver futures dropped more than 8%. The Thailand Futures Exchange announced a suspension of online silver futures trading.
A futures trader analyzed that this was a risk release event driven by a combination of shifting macroeconomic expectations and inherent market fragility. Stronger-than-expected U.S. inflation data dashed hopes for interest rate cuts, while the appointment of a new hawkish Federal Reserve Chair reinforced expectations for monetary tightening. India's tariff policy changes dampened physical demand for precious metals. These factors, combined with a rush of profit-taking from previously accumulated long positions at high levels, triggered a systemic correction across the metals market.
On the capital flow front, by the close on May 15, open interest for the main SHFE silver futures contract stood at 133,800 lots, down 11.9% from the previous day. Open interest for the main gold contract was 127,200 lots, a decrease of 8.31%. Data indicated synchronized outflows from both long and short positions.
Beyond precious metals, industrial metals like copper, tin, and aluminum also suffered. Domestically, the main SHFE contracts for tin, copper, aluminum, and nickel closed down 5.68%, 2.7%, 2.07%, and 1.96%, respectively. Internationally, LME copper, aluminum, and tin all fell over 2% during the session.
"This is not a correction in a single commodity but a liquidity panic across the entire metals sector," the trader noted. He explained that silver's excessive prior gains and crowded speculative long positions made the market vulnerable; a crack in the macro narrative triggered a cascade of stop-loss and programmatic sell orders.
On the macroeconomic front, U.S. CPI and PPI data for April both came in hotter than expected. The CME FedWatch Tool shows the market has essentially priced out any rate cuts for 2026, even beginning to factor in the possibility of a rate hike by year-end. The U.S. dollar index surged, and the 10-year Treasury yield remained above 4.4%, directly pressuring the valuation of non-yielding precious metals.
Adding to the panic on May 15 was an unexpected shock from a leadership change at the Federal Reserve. The U.S. Senate confirmed Wash as the next Fed Chair, succeeding Powell. Markets are concerned that Wash may pursue more aggressive tightening policies, potentially raising rates sooner to combat inflation. Research reports also highlight that inflation and rate cut prospects will face significant tests under the new leadership, with the market closely awaiting his first official remarks.
Simultaneously, the Indian government announced a significant increase in gold and silver import tariffs to around 15%, raising concerns about slowing physical demand and intensifying selling pressure.
"Beyond these three negative factors, the inherent fragility of the market structure itself acted as an amplifier for the plunge," a foreign investment bank metals analyst stated. He explained that over recent months, driven by capital inflows, metals like precious metals and copper had risen continuously, with speculative long positions accumulating to historically high levels, leaving the market in a sensitive state. When the macro narrative shifted from "rate cuts and safe-haven" to "rate hikes and tightening," the collective exit of profitable long positions triggered a chain reaction.
In the short term, the metals market has entered a phase of volatile consolidation for risk repricing.
Since the U.S.-Iran tensions, gold has fallen approximately 14.5%. Analysis suggests gold has underperformed compared to major equity indices during this period, indicating that monetary policy's importance for gold pricing has now surpassed geopolitical conflict itself.
Based on this framework, Morgan Stanley revised down its gold price target for the second half of 2026 from $5,700 to $5,200 per ounce in late April. The bank believes gold's pricing logic is "accelerating its shift," with short-term safe-haven premiums giving way to a macro pricing framework dominated by real interest rates and exchange rates. Subsequent gold price movements will be jointly determined by U.S. Treasury yield trends and the pace of Fed policy.
HSBC's chief precious metals analyst, James Steel, noted that despite ongoing Middle East conflicts disturbing commodity markets, in a liquidity environment of surging oil prices, rising bond yields, and a stronger dollar, the market needs cash. Gold's sell-off is primarily a reaction to financial market conditions; "gold is an insurance policy, and that insurance is being cashed in."
Regarding silver, recent gains were fueled by supply risks from Peruvian mines and industrial demand expectations, leading to massive profit accumulation. The sharp correction likely represents a pullback from overheated trading.
Analysis from Minmetals Futures suggests that earlier support from retail investment demand recovery and stockpiling by photovoltaic companies boosted Asian silver demand, reopening domestic arbitrage windows. Tight physical silver supply initially pushed prices higher before the recent retreat, and a cautious short-term strategy is advised. HSBC also warned that the silver market supply deficit is expected to narrow from 143 million ounces in 2025 to 73 million in 2026 and further to 25 million in 2027, which will limit the upside for silver prices.
The foreign bank metals analyst believes that when macro expectations reverse, all crowded trades are vulnerable, and long-term narratives cannot withstand short-term interest rate shocks. Technically, the metals market might see a rebound, but the larger question is how the Fed under Wash will navigate the "final mile" in the fight against inflation.
"Now is not the time to guess the bottom," the trader concluded. "We need to wait at least for stop-loss selling to clear and volatility to subside before the market can find a new equilibrium. For investors, focusing on marginal changes in the June FOMC meeting and Indian import data is more important than rushing to buy the dip.
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