Gold And Silver Havens Crumble In New Era Of Market Volatility
Once seen as shelters, gold and silver now swing wildly, underscoring a market regime where volatility is constant, not occasional.
The Gist
Indian investors face turbulence in metals as global markets fluctuate.
- Silver prices fell sharply by 17%, reflecting a broader downturn in Indian ETFs.
- Retail investors, once shielded, are now caught in a volatile trading environment.
- Billionaire traders are capitalising on these fluctuations, further complicating the market landscape.
Market gravity has a way of reasserting itself, often without warning or a clear explanation.
Just ask the crypto faithful.
Bitcoin, an asset we don’t track much and for good reason, recently suffered its largest weekly decline in over three years, tumbling 16% to $70,008, a staggering 45% retreat from its October peak of $126,273.
The most unsettling part for the permabulls? No one is quite sure what went wrong, reports the Wall Street Journal.
While the Dow Jones Industrial Average — that bastion of blue-chip industrials like Walmart and Boeing — crossed the 50,000 threshold for the first time this past week, the broader tech landscape is enduring a trillion-dollar wipeout.
This rout, rippling through Silicon Valley's stocks and bonds, is the most severe since the launch of ChatGPT. Software stocks are at the epicentre; an iShares ETF tracking the sector has bled nearly $1 trillion in value in just seven days.
The catalyst isn't just bubble talk. It is a fundamental anxiety over how new AI tools — specifically recent revelations from Anthropic — might dismantle the traditional business models of IT services companies.
Tarnished Silver Lining
India has been lucky to escape the AI trade wave of the last three years.
We say lucky because Indian markets and their investors have not been exposed to the wild gyrations that one often sees on Wall Street.
That luck ran dry in the last few weeks in the metals market, and Indian investors who moved into gold and silver are currently being treated to the rollercoaster ride of their lives.
While much of India’s holdings in these metals are shielded in physical jewellery, the paper side of the trade is in a tailspin:
Silver erased a two-day recovery to fall 17% on Thursday. After briefly touching $90 an ounce, it has retreated by more than a third from its January 29 high.
In Indian markets, the falls are even more pronounced. Gold and Silver ETFs crashed 20% on Thursday, reflecting a massive exodus of speculative funds.
Silver exchange-traded funds (ETFs) have fallen 38% from their all-time peak hit just seven trading sessions ago on January 29.
It is worth noting that these Indian ETFs had very few assets under management a year ago.
Safe Havens No More
Today, they are filled with millions of small investors — a shoal of fish darting between trades, mostly led by the unresearched noise of social media.
And while retail investors scramble like fish, the sharks are moving in.
Bian Ximing, a billionaire trader, made $3 billion riding gold’s rally and has reportedly built a $300 million short position against silver on the Shanghai Futures Exchange, says a report in Bloomberg.
When the sharks bet against you, the outcome is mostly not a good one.
The broader lesson is that we are in extremely uncertain territory.
Volatility is no longer confined to stocks or bonds; it has infected the traditionally safe havens of gold and silver.
Hold Assets, Not Hype
Swings are deeper, sharper, and more punitive.
On Wall Street, even a minor earnings miss is treated as a catastrophe.
Indian markets have historically been more forgiving, but the Wall Street whiplash is now extending to global asset classes, as we are seeing with gold and silver.
The bottom line is as old as the hills: Investors must exercise considerable caution. The composition of the market has changed, and with it, the stability of even the most traditional stocks.
Leave the speculation to the professionals — the ones with the MIT degrees and the algorithms — who are sitting thousands of miles away.
For everyone else, it’s time to focus on assets you actually intend to keep.
