Geopolitics, Trump declarations, tariffs, and news about a change in leadership at the Fed are currently shaping global markets. And this became even more evident when the oil prices tumbled after the Iran crisis appeared to de-escalate.
But the markets remained volatile, gold and silver prices crashed after reaching record highs, erasing in two sessions most of the gains from the beginning of the year, writes eToro analyst for Romania, Bogdan Maioreanu
Oil prices fell more than 5% on Monday, recording their biggest single-session drop in six months, after President Trump said Iran was in “serious talks” with Washington, signalling a possible easing of tensions with the OPEC member.
But the situation in that country remains fragile. Both the collapse of the Iranian regime, which could lead to a period of political uncertainty, and the opposite scenario, in which the regime consolidates and responds to the United States by blocking or restricting the flow of oil through the Strait of Hormuz, could trigger significant market volatility.
These prospects, and the fact that OPEC+ agreed to keep its oil output unchanged for March, are keeping the oil prices still up roughly 8.5% this year.
After a sustained rally that brought prices to all time records, gold has fallen nearly 20% from its highs, while silver has wiped out almost all of its gains since the start of the year. It is possible that the crash was technical, as at its highest, silver was trading 133% above its 200-day moving average and gold 32% above the same indicator.
Gold closed the month of January with a 13% gain, despite an 8.8% plunge on Friday (the worst daily loss since April 2013). The sell-off might reflect an unwinding of crowded positioning rather than a change in fundamentals. In the previous period, we had an over-allocation to bullion ETFs, leveraged futures contracts, and call option structures that mechanically amplified the rise. The news that Kevin Warsh could be appointed Fed chair strengthened the dollar and shifted monetary policy expectations, triggering forced selling as liquidity tightened.
Despite this downward move, the medium-term fundamentals for gold remain intact. Central banks continue to anchor demand, with approximately 800 tons of purchases expected in 2026, increasingly targeting tons rather than value, which makes demand price inelastic.
In this context, JP Morgan is forecasting the gold price to reach $6300 per ounce by the end of this year. In 2025, investor and central bank demand averaged around 750 tons per quarter in 2025, well above the approximately 380 tons historically needed to support higher prices. Even with some moderation, projected demand for 2026 remains supportive. But in the short term, we might see volatile price movements in both directions until the forced selling ends. After the Friday selloff, the gold price recovered over 6% in one day.
Silver closed January with a gain of 17%, after a massive 26.8% drop in a single session—an event not seen since 1980. During the month, it was at a moment up by 65%. But silver is different from gold, due to its dual nature of safe haven and technological material. It remains more fragile after a spectacular, speculative run. Unlike gold, silver does not benefit from central banks taking advantage of price declines and is more exposed to positioning, seasonal effects around the Chinese New Year, and changes in industrial demand. As positioning continues to normalize, the prices might remain volatile. After the drop in the past day, its price surged by 9%.
According to the eToro Retail Investor Beat survey, 48% of global and 53% of Romanian retail investors have gold in their portfolios. More than half at the global level and 61% of Romanian investors believe that the gold price will increase in 2026. However, when facing conditions of excessive volatility, investors should remain patient and wait for clearer evidence that excessive leverage and speculation have disappeared before taking action. And, as always, follow their strategies and trading plans.
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