China's RatingDog manufacturing PMI in January was 50.3, with sales prices rising for the first time in 14 months

# Source: Wall Street CN

By Zhang Yaqi & Li Jia

Driven by the historic crash in precious metals and doubts over the valuations of tech stocks, global markets tumbled on Monday. Gold plummeted as much as 6.3% to below $4,600 an ounce, and silver dived 12%. NVIDIA's clarification of investment rumors triggered volatility in the AI sector; the MSCI Asia Tech Index posted its sharpest drop since November, South Korea's Kospi Index—a bellwether for the AI sector—crashed 4%, and Nasdaq 100 futures fell more than 1%.

Gold, silver and global equities extended their steep declines on Monday, with January's best-performing assets facing a selloff spree, as the panic from Friday's dramatic market reversal continued to spread. The broad-based selloff across precious metals, tech stocks and cryptocurrencies is testing investors' confidence in the previous sustained rally.

The immediate triggers for the market volatility were the wild swings in precious metals and growing 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 comment that amplified market doubts about the sustainability of the AI investment boom. Meanwhile, Donald Trump's nomination of Kevin Warsh as the next Federal Reserve Chair last Friday prompted investors to reassess their expectations for monetary policy.

Spot gold broke below $4,550 an ounce on Monday for the first time since January 16, tumbling more than $330 from its intraday high. Spot silver fell below $74 an ounce, with an intraday drop of 13.01%. Asian stock markets recorded their worst two-day decline since early April, while European stocks and US equity futures pointed to further losses.

Nick Twidale, Chief Market Analyst at AT Global Markets, said: "The massive volatility in the metals market is the real catalyst. When we see such historic moves, investor confidence takes a huge hit not just for gold, but for the market as a whole."

S&P 500 futures extended their intraday decline to 1%, and Nasdaq 100 futures fell more than 1%.

Before the US market open, leading tech stocks traded lower across the board: NVIDIA dropped nearly 2%, AMD sank over 2.4%; most memory chip stocks moved down, with Western Digital falling more than 3%.

European stocks opened sharply lower across the board: the Euro Stoxx 50 Index fell 0.88%, Germany's DAX Index dropped 0.57%, and the UK's FTSE 100 Index slid 0.72%. European oil stocks declined, with BP down 2.6% and Shell falling 2.2%.

Japan's Nikkei 225 Index closed down 1.3% at 52,655.18 points, and the TOPIX closed 0.8% lower at 3,536.13 points.

South Korea's KOSPI closed down 5.26% at 4,949.67 points.

Australia's S&P/ASX 200 Index fell 1%.

Vietnam's VN Index extended its intraday decline to 1%.

Indonesia's benchmark stock index crashed 5%.

South Africa's stock market index dropped 6.1%, its biggest fall since March 2020.

The Indian rupee extended its intraday gain against the US dollar to 0.5%, leading gains among Asian currencies.

The yield on the US 10-year Treasury note was little changed at 4.23%.

Spot gold fell below $4,580 an ounce, with an intraday decline of 6.27%; COMEX gold futures pulled back below $4,600 an ounce, down 3.07% on the day.

Spot silver broke below $74 an ounce, with an intraday drop of 13.01%.

WTI crude oil extended its intraday decline to 5%.

Bitcoin briefly fell below $75,000.

## Valuation Fears Spark Tech Stock Selloff

Tech stocks were hit hard amid rising uncertainty over the outlook for AI investments. The MSCI Asia Tech Index logged its steepest drop since November, South Korea's Kospi Index—a bellwether for the AI sector—plunged 4%, and Nasdaq 100 futures fell more than 1%.

NVIDIA's remarks acted as the trigger for the tech stock selloff. The company's proposed $100 billion investment plan in OpenAI has "stalled", partly due to internal concerns about the ChatGPT developer's future competitive position. Over the weekend, Jensen Huang said NVIDIA still plans to make a "significant investment" in OpenAI, but when asked if the investment would exceed $100 billion, he replied:

"No, no, not at all."

Gary Tan, Portfolio Manager at Allspring Global Investments, said: "Huang's comments are likely to have an impact on short-term sentiment, especially for the AI-related stocks that have rallied strongly. These remarks have largely acted as a catalyst for profit-taking, and we are seeing some crowded trades in the market being unwound."

NVIDIA made a high-profile announcement of its investment plan in OpenAI last September, with its share price rising 4% on the day. However, the company's earnings report filings in November showed the $100 billion figure was not a firm commitment, disclosing that "we cannot guarantee that we will enter into definitive agreements with respect to the OpenAI opportunity or other potential investments".

## Historic Precious Metals Crash Shakes Markets

Monday's market turmoil was concentrated in the sharp swings of precious metals. Spot gold fell below $4,580 an ounce, with an intraday drop of 6.27%, a sharp pullback from its near $5,600 high hit in January. COMEX gold futures retreated below $4,600 an ounce, down 3.07% on the day.

Silver posted a 12% single-day drop, and combined with its record 26% fall on Friday, it has lost more than a third of its value in just two trading days.

Over the past year, precious metal prices have soared to record highs that have stunned veteran traders. The rally accelerated sharply in January, with investors piling into gold and silver markets, betting on geopolitical unrest, currency depreciation and threats to Federal Reserve independence. Heavy buying from Chinese speculators added a frothy element to the rally.

Garfield Reynolds, Bloomberg Strategist, said the selloff is gathering pace, with Asian traders seemingly rushing to unload assets in anticipation of a new round of declines in metals and equities during London trading hours. A cascade of falls across a range of assets—from gold to the South Korean Kospi Index, WTI crude oil and Nasdaq 100 futures—is creating a self-reinforcing downward trend.

Crude oil prices also crashed 6.3%, but market attention was largely focused on gold and silver. The MSCI All Country World Index fell 0.4%, and the Asian benchmark index dropped 2%.

## Fed Personnel Change Adds Policy Uncertainty

Trump's nomination of Warsh as the next Fed Chair last Friday has abruptly shifted the market's debate on the direction of monetary policy. An economist known for his fierce criticism of central banks and his views on monetary policy, the former Fed governor will replace Jerome Powell in May if confirmed by the Senate.

Market focus has quickly shifted from short-term interest rates to the Fed's $6.6 trillion balance sheet and its fundamental role in the markets. The 55-year-old Warsh aligned himself with Trump in 2025 by publicly advocating for interest rate cuts, a departure from his long-standing reputation as an inflation hawk. Trump said on Friday he did not ask Warsh to commit to rate cuts.

Francis Tan, Chief Asia Strategist at Indosuez, said:

"Investors are worried about 'higher rates for longer'. However, the market's confusion lies in whether Trump will exert pressure through Warsh to send more dovish signals to the market. This has led to heightened volatility across all asset classes and regions."

Bitcoin briefly fell below $75,000, the US Dollar Index held onto Friday's gains, and risk sentiment deteriorated across the board. On the political front, the US government partially shut down on Saturday, awaiting House approval of a funding deal Trump reached with Democrats after the killing of a US citizen by Minneapolis border patrol agents sparked nationwide protests.

Billy Leung, Investment Strategist at Global X Management, said:

"Market sentiment has turned defensive, but this is mostly risk reduction rather than panic. The overall mood is weak."

## Risk Warning and Disclaimer

The market is risky, and investment requires prudence. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial status or needs of individual users. Users should assess whether any opinions, views or conclusions in this article are consistent with their own specific circumstances. Any investment made based on this article shall be at the investor's sole risk.