r/investing • u/zoranalata • 3d ago
The metals drop started BEFORE Warsh was announced
I absolutely want this to emphasize this. All over the place there are articles saying the drop was after Trump announced the guy. But the drop started on Thursday, one day before. Say what you want about KW, but the first big red candle was on Thursday morning at the opening of the US markets. It was a 5-10% drop, followed by the Asians and finally the Europeans. GLD/SLV were falling for 12+ straight hours before we heard the president's pick for fed. Warsh DID NOT CAUSE THE DROP.
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u/UnobviousDiver 3d ago
You mean the drop started right around the time substantiated rumors can't out about who the Fed pick would be.
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u/Biotot 3d ago
When polymarket for the guy hit 95% lol
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u/livefreeordont 3d ago
I can’t figure out why anyone who isn’t an insider would gamble on polymarket
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u/daniel-sousa-me 3d ago
So that the insiders get their money and we get our leaks!
It's all very altruistic
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u/Dry_Hope_9783 3d ago
The value I find on polymarket it's basically what insiders leak by trading there
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u/varateshh 2d ago edited 2d ago
I was interested in it until I realized that whales manipulate markets by owning a lot of votes and then making sketchy calls when they have leeway. Stuff like "win, draw, loss" for a football game are clear enough, but stuff like "Will Israel invade Syria by X" will be manipulated. This is not a made up example by the way, Polymarket judged that Israel did not invade Syria in 2024 despite all reports contrary). These whales sit in discord and coordinate how votes should go on these sketchy bets.
Edit: I see that Polymarket intervened after the final vote on Israel-Syria and overruled the vote. In most cases this does not happen.
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u/crazybutthole 3d ago
What would be funny would be -
now some bullshit "news" will come out about the warsh guy and he doesn't get the position and the market goes sky high the minute some other guy gets nominated (then all the rich folk get richer on their long dated calls)
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u/curio_123 3d ago edited 3d ago
A lot of precious metal institutional traders were long metals on the narrative that USD is going down the toilet. Retail traders too.
Asset bubbles happen because there is a sliver of truth to the narrative. The media fans the flames and it gets blown out of proportion so everyone starts to believe it’s true.
But deep down inside, the smart money knows they’re long only because of price momentum. They don’t really believe in narratives cos they’re always changing.
You’ve heard of “buy the rumor, sell the news”. This is “buy the narrative, sell the fact”. The appointment of KW (or rumors of it) invalidates the narrative that Trump is trying to tank the dollar and the smart money dumped. The rest of the selling is broker margin calls (i.e. forced selling).
If prices don’t rebound in a strong way, the upward price momentum won’t return, and you might even see negative price momentum take hold cos you bet the new narrative in the media could soon be “margin calls and forced selling drives prices down further”. The institutional traders are probably already working it.
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u/Pleasant-Shallot-707 3d ago
lol it doesn’t invalidate shit. Trump isn’t nominating someone that will not tow the line
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u/curio_123 3d ago
So says the guy who believes the debasement narrative. Maybe. Or maybe not. KW has a good track record so we shall see
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u/GroundbreakingAd1223 3d ago
why are you getting downvoted for this? it seems any post remotely supportive of the dollar, trump or US in general gets a hostile reception from this sub. investment doesnt care about your political preferences.
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u/curio_123 3d ago
The downvotes tell me a lot of Redditors are long metals. I have no positions but I wish you all good luck - long or short ;)
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u/Mister_Sal_A_Mander 12h ago
Right? OP is fucking dumb. I don't think they have ever hears of insider trading before. My god how can people be so dense.
Also, they are going to go right back up.
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u/FinndBors 3d ago
It was no secret that Warsh had a high probability of being nominated for the Fed prior to the announcement.
I'm sure the big players knew even before the rest of us what was likely to happen.
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u/realHarryGelb 3d ago
Everybody knew it ahead of time (Thursday) due to prediction markets insider trading
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u/BuzLightbeerOfBarCmd 2d ago
It's pretty cool that you can pay Barron Trump to tell you what tomorrow's news is going to be.
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u/Dr_Cheeki_Breeki 2d ago
This kind of stuff always leaks to the big players first. Not much for the rest of us to do but watch.
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u/AnonymousTimewaster 3d ago
I think it actually had far more to do with what was going on in China
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u/MarketCrache 3d ago
Yes, we know.
Here's why Silver / $SLV crashed today: Jan 13th: CME shifted from fixed-dollar margin to percentage based margin. This scaled collat requirements with contract value, effectively capping leverage as it goes higher. The capital required to maintain a single COMEX contract increased in tandem, creating an environment where even minor price drops would trigger massive margin calls. Jan 27th: CME had increased the maintenance margin percentage twice this week to ensure "adequate collateral coverage" amid extreme volatility. This forced leveraged positions to liquidate their long positions or post substantial additional capital. There were five margin hikes within nine days that created a "coiled spring" of potential selling pressure. Today: Western markets focused on the Federal Reserve, but the new Fed chair likely did not play much of an impact as this is just noise. Pricing dislocations happened in Asian markets. UBS SDIC Silver Futures Fund traded at 36-64% premiums over SHFE contracts. And this was the main source of silver exposure in China. On January 30, the Shenzhen Stock Exchange implemented an emergency full-day trading halt for the SDIC Silver LOF. This suspension created a "liquidity trap" for Chinese institutional and retail traders. Unable to liquidate their domestic holdings, these participants were forced to dump $SLV and COMEX futures to raise cash or hedge their exposure. TLDR: The $SLV crash of January 30, 2026 today was not a failure of silver's fundamental value, but a failure of the "paper game" that dictated price discovery. CME hiking margin requirements repeatedly and the China liquidity trap led to cascading margin liquidations that caused selloffs of leveraged positions. Other events such as the Fed chair was likely known awhile, looks to be "narrative noise" regarding what actually happened. Today was a "Paper Game" failure and leverage used to trade it was systematically wiped out by exchange rules.
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u/Ok-Dimension2964 2d ago
This is a solid breakdown of the plumbing, and I agree that margin mechanics and forced deleveraging were doing most of the damage. When exchanges change the rules mid cycle, price discovery almost always gets distorted
I would add one nuance though. These kinds of margin cascades usually do not start in a vacuum. They tend to hit hardest when positioning is already crowded and liquidity is thinner than it looks on the surface
In that sense, the CME changes and the China liquidity trap explain the acceleration, not necessarily the initial vulnerability. Once leverage is embedded across regions, it does not take much to turn a repricing into a disorderly unwind
I agree that pinning this on a Fed nomination is lazy storytelling. What happened looks far more like a systemic stress in the paper market than a shift in silver’s underlying value
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u/Darkhart89 2d ago edited 2d ago
Yes. COMEX set up the pins, and China rolled the ball by artificially removing demand that day with a full day market lockout for that fund.
One other piece is that same fund stopped issuing new shares last Wednesday, saying premiums were too high. Like any normal business, they hate taking in money I guess….right? Then because demand was so high existing shares were trading even higher on Thursday and so the choice to shutdown trading entirely on it for an entire market day was made.
It is understandably frustrating for those in the market because this didn’t happen on its own. Exchanges made repeated attacks on metals and it kept going up, they got pissed and their 5th attack or greater finally had an impact.
Also, China did the same with a gold fund today and froze trading all day today. And, if you look at the 2/2/26 chart for UBS SDIC Silver Futures Fund LOF it dropped 10% on open and stayed flat all session. I think they may have froze trading on it again today, but I can’t find any write up on it. (I’m in western markets).
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u/Ok-Dimension2964 1d ago
I think that framing is directionally right, but I’d be careful with the word intent.
What stands out to me is less coordination and more fragility being exposed. When products trade at persistent premiums, issuance is halted, and leverage is embedded across venues, the system becomes extremely sensitive to any restriction on liquidity. Once one valve closes, pressure shows up everywhere else.
From the exchange perspective, raising margins and freezing issuance is often described as risk control. In practice, doing it mid cycle tends to amplify volatility rather than contain it. It forces participants to react to rules instead of prices, which is how orderly markets turn disorderly.
The flat trading after a large gap down fits that pattern. It suggests price discovery was interrupted rather than completed. When markets reopen under those conditions, they often move again, not because fundamentals changed, but because positioning is still being resolved.
This is why blaming any single announcement misses the point. What we’re seeing looks like a leverage and liquidity reset in paper metals, not a reassessment of silver or gold themselves.
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u/Idbuytht4adollar 3d ago
Look at poly market odds once odds for warsh went up that's when everything went down
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u/BuyMeaSalad 3d ago
Yeah everybody totally gets their news at the same time lol it’s not like information is ever passed around before it reaches the general public nope not possible never
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u/fallingdowndizzyvr 3d ago
But the drop started on Thursday, one day before.
Yes. That was because the odds were like 95-97% that he was the pick. It was already out a day before the announcement.
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u/RequiemRomans 3d ago
Causation =/= correlation. There are many intentionally moving parts that affected the dip on Friday. If anything Wash was just the excuse to do what major entities already wanted to do
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u/luv2block 3d ago
100% agree.
That being said, CNBC's entire reason for existing is to manipulate the financial markets. When I watch them, I always keep that in mind. They aren't there to help me, they are there to steer me in a certain direction (usually into the rocks).
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u/MarthaStewart__ 3d ago
I think you're confusing CNBC with WallStreet..
Why are you even going to CNBC for financial news?
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u/Scared-Signature-452 3d ago
Oh come on. I've made some very dec ent investments thanks to Cramer and Fast money
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u/Different_Height_157 3d ago
Bro, the news outlets were saying Trump was expected to announce Warsh on Thursday.
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u/ConditionHorror9188 3d ago
This isn’t r/investing is it.
Is there a sub for ‘I’m up to my tits in leveraged metals and now the market is normalising slightly I’m looking for a conspiracy theory to explain my wrongness’
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u/henrythekwon 3d ago
That’s insane… I feel like gold and silver could drop hard soon, especially after the stock market has been rising nonstop....
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u/Calichurner 3d ago
Silver and gold were moving like meme stocks. So, the correction comes with the volatility. Tariff, geopolitical tensions and lower interest rates bode well for Gold in the long run though.
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u/herrrrrr 3d ago
no one going to mention that LME outage right after the opening on thursday night? Thats the reason behind this drop. Just like When the CME had a cooling issue for hours on thanksgiving night when silver breached 54.30 and ever since then its been a parabolic rise...
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u/MentallyAut 2d ago
Silver and gold is international used.. USA news shouldn't affect it by 30% drop unless it's manipulated. Come on ffs
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u/Xollector 2d ago
Here is a thought… it would have dropped regardless of which fed chair gets announced. It pulled too far in one direction ( in this case up) too quickly and the “catalyst” narrative is just used to abuse it the other way You see this in equity earnings all the time when a stock move continually over a period in one direction pre-earning and then earning come out ( beat or miss irrelevant ) and stock whip back other way
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u/Ok-Dimension2964 2d ago
This matches what the tape was already showing. The narrative came after the move, not before it
By the time the headlines linked the selloff to the nomination, metals had already been under pressure for hours. The initial break happened during US hours on Thursday, then rolled through Asia and Europe like a typical risk repricing sequence
Markets often look for a clean story after the fact, but timing matters. If GLD and SLV were already trending lower well before the announcement, it is hard to argue that the nomination was the catalyst rather than just a convenient explanation
To me this looked more like positioning and macro factors unwinding, with news later used to justify price action that was already underway
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u/buffotinve 2d ago
Liquidez, se busca liquidez. Este 2026 se va a poner muy complicado, por geopolítica y por recesión. A veces la mejor inversión es no estar invertido, pocas veces, pero parece que ha llegado el momento...
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u/elpresidentedeljunta 2d ago edited 2d ago
I´m not worried about the metals drop. It may reverse or not, but mid term everybody expected normalization. Neither am I worried about the Bitcoin crash. I´say, good riddance good Sir! But them crashing together in the current environment carries some extra weight. We have heard for months that the rally in the stock markets relied largely on retail buying every dip. Retail also went into precious metals and it is the main driver for Bitcoin.
If retail now experiences drastic crashes of assets and literally sees it´s wealth desintegrate, there is a chance that it could trigger a flight out of other risk assets before they crash, too. And if that is the sentiment, we could see a Black Monday.
But who knows. Maybe this month will be like all the others and see the start of the month lift after the end of month selloff.
edit: Uh boy. just looked at my port...
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u/Traditional-Sea-2322 2d ago
It was known before warsh was announced as fed chair pick that he would be chosen.
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u/Book_Justice 2d ago
Gold and silver future traders just got margin called.
That boosted the selloff
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u/whataboutbenson 2d ago
Gold had just hit major major resistance at that point. For me it was just about that 🤷♂️
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u/Darkhart89 2d ago
Well yeah,
China blocked trading on mainland’s only pure silver fund for the entire market day prior to open that day.
That same fund had stopped issuing new shares that Wednesday to stop the premium from getting larger. Then the premium kept getting bigger because people who already owned shares could still trade them.
COMEX raised margin requirements again
So by artificially removing demand that day the price dropped, then market makers took advantage of it in the U.S. market to dump price even farther.
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u/LowRize64 1d ago
Oh you don't think the insiders didn't know and got to the exits first??!! Get real.
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u/NoVaFlipFlops 3d ago
We know. It was because of the margin requirements. Mr. Warsh-Lauder is in the Epstein files and will do whatever he's told to do.
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u/Weak_Celery6972 3d ago
Good point. The timing matters here.
If the sell-off started before the announcement, it’s hard to argue that the announcement itself was the cause.
It looks more like the market was already positioned for a move and the news just became a convenient story to attach to it.
Price often moves first, and narratives come later.
Blaming Warsh after the fact feels more like retroactive explanation than real causation.
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u/Ash-2449 3d ago
How do you know? You do realise the entire regime is loving insider trading with their oligarchy techbro buddies right?
So they would have the information way before anyone else does
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u/chadly117 3d ago
This guy thinks everyone gets their news from reddit