I noted that the headline blames Trump diplomacy, but that's only part of the story.
I think that the biggest trigger was Trump's Fed chair nomination. Kevin Warsh's nomination quelled fears over Fed independence and stabilized the dollar — instantly unwinding one of gold's strongest pillars: the "debasement trade." Investors who piled into metals as a dollar collapse hedge had no reason to hold. They sold.
Then came the geopolitical unwind. Oil prices fell around 5% after Trump said the U.S. and Iran were "seriously talking" to each other, and that de-escalation signal spilled directly into gold and silver. Less war risk = less safe-haven demand. Simple math.
Add leverage to the mix. High levels of leverage and significant volatility created a powder keg — every man rushing for the exit at the same time, forcing prices lower, which in turn begot further forced selling. Silver's crash — its worst day since 1980 — was less about macro and more about margin calls triggering a cascading unwind.
But here's the critical nuance: The structural bull case hasn't broken. I noted that JP Morgan analysts still expect gold to reach $6,300 an ounce by end-2026, and analysts maintain year-end forecasts of $6,500 per ounce, noting that central bank buying and institutional support remain intact. Physical demand from China and emerging market central banks didn't disappear — it actually surged on the dip.
The bottom line — Trump diplomacy trimmed the war premium. But what really crashed metals was a crowded trade meeting three simultaneous exit signals at once.
Key Takeaways:
1. This was a technical reset, not a structural breakdown — fundamentals for gold remain intact
2. Silver's drop was amplified by leverage; its industrial demand story (AI energy infrastructure, solar) is still compelling
3. Buy the dip selectively: Gold miners (GDX) and physical gold are now more attractively priced
4. Watch the Iran deal timeline and PCE inflation data — these are the next catalysts in either direction
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
