Gold and silver prices have dropped sharply
On February 2, unexpected changes were observed in the precious metals market. This was reported by Zamin.uz.
The price of gold fell from a historic level of $5600 per troy ounce to a range of $4400–4800. This decline amounted to nearly 15–20 percent.
Although gold is usually considered a stable asset, this time its price dropped slightly. The price of silver fell even more sharply.
Previously around $120, the price reached a range of $75–80, experiencing a loss of nearly 30 percent. Market sentiment changed drastically over several trading sessions.
According to experts, this change has an unusual amplitude even for the precious metals market. This price decline is explained by several factors.
The first reason is that after prices reached record levels, large investors began to take profits. This process acted as a factor pushing the market down.
The second reason was news and changing expectations surrounding the US Federal Reserve System (FRS). Reports circulated about the possible appointment of Kevin Warsh as the head of the FRS.
He is known as a supporter of a strict monetary policy. This encouraged investors to move away from non-yielding assets.
The third reason was the strengthening of the US dollar. When the dollar strengthens, assets like gold and silver usually come under pressure because they become more expensive for investors holding other currencies.
This reduces demand and negatively affects prices. Experts assess this decline as a “market correction” following a record-level increase.
The dynamics in the coming days are expected to be determined by FRS policy, the dollar exchange rate, and the global economic situation. In the current situation, market emotionality is high, and significant changes are likely to be observed in the near future.
