Global stocks slumped, with oil and precious metals plunging in volatile trade on Monday as a multitude of factors including investors reassessing geopolitical risks and US President Donald Trump indicating Iran was in “serious” discussions with Washington.
A plunge in precious metals including gold and silver led to a wider market sell-off during Asian trading hours. Silver fell as much as 11.25 per cent to lows of $75.10 an ounce and and gold tumbled as much as 5.34 per cent to $4,604.47 an ounce.
Asian stocks suffered their sharpest two-day slump since April, with futures signalling the weaker sentiment will continue to be a drag on European and Wall Street trading sessions.
S&P 500 futures lost 1.2 per cent and Nasdaq futures fell 1.6 per cent, on increased concerns about technology valuations. The focus will be on tech majors Alphabet, Amazon and AMD announcing their financial earnings this week.
“US President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair on Friday, triggering dramatic volatility across markets,” Mayed Alrashdi, research analyst at Emirates NBD, said in a note on Monday.
“Precious metals experienced their worst day in decades,” he added.
The sell-off for gold has been far more brutal than expected, said Ipek Ozkardeskaya, a senior analyst at Swissquote.
"There has been a lot of speculation in recent weeks, and that speculative air is now coming out quite violently," she said.
"Both metals [gold and silver] are heavily sold in Asia, suggesting that leveraged positions and stop losses have not yet been fully cleared ... For silver, the rally on the way up was faster than gold’s, so the correction on the way down is faster too."
Oil price hit
Crude prices fell more than 5 per cent in morning trading after Mr Trump indicated over the weekend that Iran was in “serious” discussions with Washington, and as Opec+ members reaffirmed a pause in oil output growth for March.
Brent, the benchmark for two thirds of the world's oil, was trading 5.06 per cent lower at $65.81 a barrel at 10.12am UAE time on Monday. West Texas Intermediate, the gauge that tracks US crude, retreated 5.28 per cent to $61.77 per barrel.
Mr Trump said on Sunday that Iran is “seriously talking” with the US, and that he hopes it will result in “something that’s acceptable”.
Asked if a final decision on Iran had been made, the US President told reporters aboard Air Force One: “Certainly, I can't tell you that, but we do have very big, powerful ships heading in that direction. I hope they negotiate something that’s acceptable.”
“Some people think that some people don’t make a negotiated deal that would be satisfactory with no nuclear weapons, and said they should do that, but I don’t know that they will. But they are talking to us, seriously talking to us,” he added.
As a result, “crude futures came in for a sharp sell-off when markets opened Monday morning on a perceived easing of US-Iran tensions, which had pushed prices to four-month highs last week”, said Vandana Hari, chief executive of Singapore-based Vanda Insights.
Mr Alrashdi said concerns about US-Iran tension and potential disruptions to Middle East crude flows “continue to underpin prices despite expectations of oversupply”.
Also, Opec+ on Sunday said it has agreed to keep its oil output unchanged for March. The supergroup of oil producers said that the next meeting will be held on March 1.
“The countries will continue to closely monitor and assess market conditions, and in their continuous efforts to support market stability, they reaffirmed the importance of adopting a cautious approach and retaining full flexibility to continue pausing or reverse the additional voluntary production adjustments,” Opec+ said. In November, the group froze further planned increases for January through March this year due to seasonally weaker consumption.
“Options include reversing the previous production increases, maintaining current production levels, and/or further unwinding production cuts,” said Giovanni Staunovo, a strategist at the Swiss bank UBS.
“The [Opec+] meeting lasted just six minutes – a record – suggesting there was no pushback and broad support for the decision.”
Temporary supply disruptions in the US and Kazakhstan, as well a weaker US dollar and geopolitical tensions in the Middle East have supported crude prices in 2026,” Mr Staunovo added.
“An easing of those disruptions is our base case, and as a result of it, we look for a modest drop in oil prices over the coming weeks.”
The US dollar, meanwhile, held to gains as investors considered what a Fed under Mr Warsh might look like.
The dollar index remained above 97 on Monday after rising about 1 per cent in the previous session.
"The US — and global — economy has become deeply addicted to central bank buying, and weaning markets off free money could be so painful that some think the Fed’s balance sheet could ultimately end up larger under [Mr] Warsh than before. Time will tell," Ms Ozkardeskaya said.
