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Traders faced whiplash in metals markets on Thursday as gold and silver prices dropped from record highs following a frenzied surge in prices this week.
Copper led a blistering metals rally in morning trading in London that pushed precious metals to new records, before a sharp sell-off in the afternoon session that saw gold, silver and a range of other metals slide.
“Volatility cuts both ways,” said Trevor Greetham, head of multi-asset investing at Royal London Asset Management, which took some profits on its gold holdings in the previous session after the record run.
“Gold can act like a risk asset if people need to liquidate holdings to meet margin calls,” he said, citing the big fall in Microsoft’s shares on Thursday — suggesting that some traders may have been forced to sell their precious metals to cover losses from a sharp sell-off in tech stocks.
Investors have poured into metals this year at an unprecedented pace in search of reliable stores of wealth in the context of growing geopolitical turmoil and concerns about the dollar, historically seen as a haven asset.
While gold has been a clear winner, silver, copper and other metals have also been caught up in the rally.
However, after jumping 10 per cent to above $14,000 per tonne for the first time, the copper price pared gains to about 4 per cent, while the prices of metals, including silver, gold and aluminium, fell.
Gold was down 1.4 per cent at about $5,324.90 per troy ounce, having earlier climbed to almost $5,600.
Analysts expressed confusion and disbelief at the strength of the rally and then as prices turned sharply downwards.
Neil Welsh, head of metals at Britannia Global Markets, said the volumes traded on Thursday had been “huge”, describing some of the moves as “ferocious”.
Gold prices have hit a series of records this year, rising by almost 30 per cent to surpass Wall Street banks’ end-of-year forecasts — which averaged about $4,700 a troy ounce — less than one month into 2026. In spite of the rally’s reversal on Thursday afternoon, gold remained poised for its strongest monthly surge on record.
While copper is primarily known for its industrial uses, its recent surge has been supported by an unprecedented level of investor demand and speculators entering the market, according to analysts.
One indicator that buyer interest in copper is starting to mimic that in gold is inflows into copper exchange traded funds. Money going into such ETFs in the US has “exploded” this year, with $1.2bn in net inflows so far, already more than double the $426mn seen in the whole of 2025, according to Sprott Asset Management.
Analysts say an influx of speculative investors into metals markets is one driver of higher volatility. Some speculators in the copper market appeared to have “moved into profit-taking mode”, said StoneX analyst Natalie Scott-Gray.
Some analysts have warned that recent high prices may not reflect the fundamentals of the markets themselves. Helen Amos, of BMO Capital Markets, said in a note that fresh data suggested “sluggish demand for Chinese crude steel, copper and zinc in November and December”, with high prices not necessarily an indication of growing demand. China is the world’s largest consumer of many commodities, including copper.
Additional reporting by Rachel Rees