Investors losing trillions of dollars in overheated gold and silver markets will reduce speculative pressure on agricultural commodity prices

An unprecedented collapse in the precious metals market has shocked investors. After hitting all-time highs, gold and silver prices fell sharply on Thursday, posting record losses for a single trading day.

After a long and rapid rise in prices, traders began to sell assets en masse to lock in profits, which caused a chain collapse in quotes. The news that Trump nominated Kevin Warsh to the post of chairman of the US Federal Reserve calmed some speculators who were playing on the uncertainty of monetary policy. Democrats agreed with Republicans on a budget vote, so the shutdown, which began on December 31, will soon end.

Gold traded at peak values on Thursday, reaching a record $5,608/ounce. Prices rose for the sixth consecutive month, showing the best dynamics since the 1980s.

However, market sentiment changed dramatically on Friday, with the price of gold falling more than 16% to $4,683/ounce, its biggest one-day drop since 1983.

The price of silver rose to a record $122/ounce on Thursday, but on Friday it also fell 36% to $76/ounce, the biggest daily drop since 1921. However, given the increase in quotes for the year three times, silver is still trading 60% more expensive than a year ago.

Experts believe that the precious metals market lost more than $2 trillion in capitalization, with the biggest losses suffered by small speculators who used brokers’ leverage. The market was oversaturated with buyers using leverage (borrowed funds), and when the price began to fall, automatic stop-loss orders and brokers’ demands for additional collateral (margin calls) were triggered, which led to automatic closing of positions and a record drop in quotes.

On Saturday, the price of Bitcoin fell 7.1% to $78,100 in New York trading, its lowest level since April 2025. Ethereum fell 10% and Solana fell 11%. The total market capitalization decreased by about $111 billion during the day.

According to Bloomberg, such a decline is increasing investor frustration with Bitcoin, which has failed to respond to a number of events that previously led to an increase in its value. Experts believe that trust in cryptocurrencies as reliable assets is decreasing.

The Fear and Greed Index is at extreme lows and is 18 points out of 100. That is, the market is in extreme fear, so speculators will be very cautious in trading in the coming weeks, and agricultural futures markets will remain under pressure only from fundamental factors, in particular global balance sheets and weather.

Tags: prices, agricultural products