"Black Monday"! Global stock markets fell together, Nasdaq futures down 1%, South Korean stock index down 5%, NVIDIA cools AI expectations, gold and silver face historic sell-off

Gold, silver, and global stock markets continued to plummet on Monday, with the assets that performed strongest in January facing intense selling, as panic from Friday's sharp market reversal continued to spread. This comprehensive sell-off, covering precious metals, tech stocks, and cryptocurrencies, is testing investors' confidence in the previously sustained upward trend.

The direct trigger for the market volatility is the sharp fluctuations in precious metals and concerns over tech stock valuations. NVIDIA CEO Jensen Huang stated that the company's proposed $100 billion investment in OpenAI "was never a commitment," a statement that intensified doubts about the sustainability of the AI investment boom. Meanwhile, Trump's nomination of Chris Waller as the next Federal Reserve Chairman last Friday prompted investors to reassess monetary policy expectations.

On Monday, spot gold fell below $4,550 per ounce for the first time since January 16, retreating over $330 from its daily high. Spot silver dropped below $74 per ounce, with a daily decline of 13.01%. Asian stock markets recorded their worst two-day drop since early April, while European and U.S. stock futures indicated further declines.

Nick Twidale, Chief Market Analyst at AT Global Markets, stated: "The massive volatility in the metals market is a real catalyst. When we see such historic fluctuations, investor confidence drops significantly, not just in gold but across the entire market."

• S&P 500 futures expanded their daily decline to 1%. Nasdaq 100 futures fell over 1%.
• South Korea's Seoul Composite Index dropped 5% during the day. Samsung and SK Hynix fell.
• Australia's S&P/ASX 200 Index fell 1%.
• Vietnam's VN Index expanded its daily decline to 1%.
• Indonesia's benchmark stock index plummeted 5%.
• The Indian rupee rose 0.5% against the dollar during the day, leading Asian currencies.
• The yield on the U.S. 10-year Treasury bond remained largely unchanged at 4.23%.
• Spot gold fell below $4,580 per ounce, with a daily decline of 6.27%. New York futures gold retreated below $4,600 per ounce, down 3.07% for the day.
• Spot silver fell below $74 per ounce, with a daily decline of 13.01%.
• WTI crude oil expanded its daily decline to 5%.
• Bitcoin briefly fell below $75,000.

Tech Stock Valuation Concerns Trigger Sell-off

Tech stocks were hit hard amid increasing uncertainty over the prospects of AI investments. The MSCI Asia Technology Index recorded its largest drop since November, with South Korea's Kospi Index, a barometer for the AI sector, plummeting 4%, and Nasdaq 100 futures falling over 1%.

NVIDIA's statement became the catalyst for the tech stock sell-off. NVIDIA's plan for a massive $100 billion investment in OpenAI has been "paused," partly due to internal concerns about the future competitive position of the ChatGPT developer. Jensen Huang stated over the weekend that the company still plans to make "substantial investments" in OpenAI, but when asked if the investment amount would exceed $100 billion, he responded:

"No, no, that's not the case at all."

Gary Tan, portfolio manager at Allspring Global Investments, stated: "Jensen Huang's comments may impact short-term sentiment, especially for those AI-related stocks that have surged. These remarks primarily serve as a catalyst for profit-taking, and we are seeing some crowded trades in the market being unwound."

NVIDIA made a high-profile announcement last September regarding its investment plan in OpenAI, with the stock price rising 4% on that day. However, the company's financial report in November revealed that this $100 billion figure was not a firm commitment, as the company disclosed that "we cannot guarantee that we will enter into a definitive agreement regarding the OpenAI opportunity or any other potential investment."

Historic Plunge in Precious Metals Shocks the Market

The market turmoil on Monday was concentrated in the extreme volatility of precious metals. Spot gold fell below $4,580 per ounce, down 6.27% for the day, significantly retreating from the nearly $5,600 high reached in January. New York futures gold dropped below $4,600 per ounce, down 3.07% for the day.

Silver saw a daily drop of 12%, combined with a record drop of 26% on Friday, resulting in a cumulative decline of over one-third over the two trading days.

Over the past year, precious metal prices soared to historically high levels that shocked seasoned traders. The surge accelerated sharply in January, as investors flocked to the gold and silver markets, betting on geopolitical turmoil, currency devaluation, and threats to the independence of the Federal Reserve. A significant amount of buying from Chinese speculators added a bubble component to this rally.

Bloomberg strategist Garfield Reynolds noted that the sell-off is accelerating, with Asian traders seemingly eager to offload assets in anticipation of a new round of declines in metals and stocks during the London trading session. A cascading decline across a range of assets, from gold to the South Korean Kospi index, WTI crude oil, and Nasdaq 100 futures, is forming a self-reinforcing trend.

Crude oil prices also plummeted by 6.3%, but market attention was primarily focused on gold and silver. The MSCI Global Index fell 0.4%, and the Asian benchmark index dropped 2%.

Federal Reserve Personnel Changes Add Policy Uncertainty

On Friday, Trump nominated Waller for the next Federal Reserve Chair, abruptly shifting the market's debate on the direction of monetary policy. Waller is an economist known for his fierce criticism of central banks and monetary policy views; if confirmed by the Senate, this former Fed governor will succeed Powell in May Market focus has quickly shifted from short-term interest rates to the Federal Reserve's $6.6 trillion balance sheet and its fundamental role in the market. The 55-year-old Walsh aligns with Trump by publicly advocating for interest rate cuts in 2025, which contradicts his long-standing reputation as an inflation hawk. Trump stated on Friday that he did not ask Walsh to commit to rate cuts.

Francis Tan, Chief Strategist at Indosuez Asia, stated:

"Investors are concerned about 'maintaining high interest rates for a longer time.' However, the market's confusion lies in whether Trump will pressure Walsh to release more dovish signals to the market. This has led to increased volatility across asset classes and regions."

Bitcoin briefly fell below $75,000, the dollar index maintained its gains from Friday, and risk sentiment deteriorated overall. On the political front, the U.S. government entered a partial shutdown on Saturday, awaiting House approval of the funding agreement reached with Democrats after nationwide protests were triggered by the killing of American citizens by border patrol personnel in Minneapolis.

Billy Leung, an investment strategist at Global X Management, stated:

"Market sentiment has turned defensive, but this is mainly a risk reduction rather than panic. Overall sentiment is weak."