After posting a record intraday loss last Friday, precious metals extended their sharp sell-off, with silver dropping as much as 16% and spot gold sliding up to 10% in early Monday trading.
On COMEX, both gold and silver also posted steep losses, as markets reacted to looming increases in CME precious metals margin requirements due to take effect at the session close.
Investor focus was further shaped by uncertainty around the future interest rate stance of Kevin Warsh, US President Donald Trump’s pick for Federal Reserve chair.
Oil prices also came under heavy pressure, falling more than 5% after easing tensions between the United States and Iran reduced concerns over potential supply disruptions from the OPEC member.
Base metals, including copper, experienced significant declines as market volatility prompted Chinese bulls to retreat, following a period of turmoil in global metals markets.
Copper, in particular, saw its slump from a recent record deepen.
Gold and silver extend losses
The gold contract on COMEX fell sharply throughout the day, but reversed most of those losses at the time of writing.
Last week, the contract hit a record high of above $5,600 per ounce. Gold was at $4,738 per ounce, down 0.3%.
On the other hand, silver prices on COMEX plunged more than 38% from their record high of $120 per ounce to $75 an ounce on Monday.
However, at the time of writing, prices were nearly 4% higher at $81.735 an ounce.
CME Group announced on Saturday that it is hiking margins on its metal futures, with the changes taking effect after market close on Monday.
COMEX gold futures margins (1oz) will be raised from 6% to 8%. COMEX 5000 silver futures (SI) are set to increase to 15% from 11%.
Additionally, platinum and palladium futures will also see increases in margin requirements.
Higher margin requirements typically have a negative impact on the contracts they affect.
This is because the increased capital required can reduce speculative interest and liquidity, often forcing traders to close out their existing positions.
“Price direction in the near term will hinge on the extent of dip‑buying from Chinese investors following Friday’s retreat,” Ewa Manthey, commodities strategist at ING Group, said.
Overall, volatility across precious metals is likely to remain elevated in the near term. For gold and silver, macro uncertainty, real rate expectations, and USD direction will continue to dominate sentiment.
Oil plunges on easing tensions
Both ICE Brent and NYMEX WTI crude oil prices faced significant renewed downward pressure this morning, experiencing a drop of over 5%.
Downward pressure has been exerted on the market due to a combination of factors.
The primary catalyst is the news of renewed US-Iran negotiations, which has reduced the geopolitical risk premium by raising the prospect of a potential deal.
This downward momentum has been further amplified by a general correction observed across financial markets.
OPEC+ has confirmed the extension of its supply increase freeze until March, a three-month pause initially agreed upon in November.
This decision was reaffirmed over the weekend by eight major members, including Saudi Arabia and Russia, despite the recent rise in prices.
However, the group did not indicate its policy outlook beyond the first quarter, ahead of its next scheduled meeting on March 1.
Global crude prices are under pressure due to increased supply and production exceeding demand.
The market is seeing additional barrels, including crude from Venezuela.
Contributing to the price drop, OPEC+ decided to extend its current supply freeze, maintaining unchanged output levels for March.
Trade Nation’s senior market analyst David Morrison said:
Combined, these factors have capped prices and put downside pressure on energy markets despite lingering geopolitical risks.
The price of West Texas Intermediate was at $62.39 per barrel, down 4.4%, while Brent fell 4.3% to $66.36 per barrel.
Copper slips
Copper and other base metals experienced significant losses, extending copper’s slump from its recent record high.
This decline follows a turbulent period in global metals markets, with Chinese bulls retreating.
On the London Metal Exchange, copper dropped as much as 5.7% to $12,414.50 a ton.
At the time of writing, the price was at $12,881 per ton, down 2.2%.
Other metals, including aluminum, tin, nickel, and silver, also fell sharply.
Copper’s price volatility was marked by a spike above $14,500 last Thursday, followed by a sharp drop below $13,000 on Friday, with the slide continuing into Monday.
In January, both base and precious metals saw a significant surge. This rally was fueled by bullish Chinese investors who poured capital into commodities, driven by skepticism about the dollar’s value and a move away from traditional investments like currencies and sovereign bonds.
“The current selloff was triggered by the nomination of a known inflation fighter to lead the US Federal Reserve last week and declines have gathered momentum with no sign emerging yet of dip-buying,” Neil Welsh, head of metals at Britannia Global Markets said.
Copper futures experienced volatile trading after a strong performance in 2025, during which prices climbed over 40%.
This surge was driven by factors including mine disruptions, speculation surrounding demand from the energy transition, and potential US import tariffs.
“The latest outsized moves surprised seasoned observers, with some traders exiting the market, citing heightened risks and a disconnect with softening physical markets,” Welsh said.
But inside China, talk of dip-buying still filled chat groups and social media over the weekend and analysts are not ruling out another swing higher.
The post Commodity wrap: gold, silver, oil, and copper fall sharply on CME margin hikes, geopolitical easing appeared first on Invezz
