GOLD: Weakening Bias Remains, Equity Moves Giving Some Support
- Gold is up modestly Friday but remains down c.10% from an all-time high reached last week. The reversal came after gold and silver saw strong rallies in January, both reaching successive record highs. The markets were ably supported by speculator buying, geopolitical turmoil and concerns about the Federal Reserve’s independence.
- The rally came to an abrupt halt at the end of last week, with bullion plunging the most in more than a decade and silver recording its biggest daily drop on record.
- This has sent shockwaves through gold markets with platforms in China having liquidity crises and CME upping their margin requirements.
- Gold's 1 month At the Money Volatility (a commonly used volatility measure) averaged 16 for much of 2025, before jumping to a high of 37 last week.
- Gold is up Friday by 1% yet remains down by -1.5% for the week, and has traded in a US$4,655 - $4,846 range throughout the trading day. Equity weakness across the region is giving gold some support in the afternoon, but the weakening bias remains for now. Expect more volatility in the near term as markets adjust from a wild weak for precious metals.
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