On Thursday, markets experienced a sudden broad-based selloff. Equities declined amid renewed concerns over AI investment returns, triggering a synchronized cross-asset de-risking move and liquidity rebalancing. Metals bore the brunt of the pressure: spot gold plunged nearly $200 within 30 minutes during the U.S. session, briefly touching $4,878.37/oz and closing down more than 3%. Spot silver dropped around 10.64% intraday to $75.26/oz, while LME copper fell as much as 2.9%. Some capital rotated into U.S. Treasuries, with the 10-year yield settling around 4.17%.
Market structure suggests this was more of a systematic unwind driven by algorithms and CTA positioning after key technical levels were breached. Momentum-driven buying had previously accelerated gains in gold and silver, with stop-loss clusters concentrated below $5,000 and above $5,100. Once those levels gave way, cascading sell orders intensified short-term volatility. Additionally, concentrated trading in iShares Silver Trust call options (May–June expiry, $125 strike) amplified high-level position unwinds.
From a fundamental perspective, markets now await CPI data. Headline inflation is expected to ease from 2.7% to around 2.5% (possibly 2.4%). However, inflation risks remain present. Five-year forward inflation expectations are hovering around 2.5%, while core inflation remains just below 3%. The recent widening between nominal Treasuries and TIPS indicates a rising inflation premium.
If CPI surprises to the upside, the “higher for longer” narrative will strengthen. If inflation softens, rate-cut expectations could rebound, potentially stabilizing metals.
Overall, this episode appears more like technical de-risking and profit-taking rather than a structural shift. Short-term volatility has risen sharply, and the next directional move will depend on CPI outcomes and the battle around key technical levels.
