Silver and gold tumble triggers major reset for mining stocks

Core Insights - The selloff in silver and gold prices on January 30 was anticipated due to technical indicators signaling overbought conditions, leading to significant declines in both metals [1][5][6] - The decline in precious metals prices was linked to President Trump's nomination of Kevin Warsh as the next chairman of the Federal Reserve, which raised concerns about potential interest rate increases [2][3] Price Movements - Silver prices dropped 31% to $78.531 per troy ounce, marking the largest decline since the 1980 bubble burst [1] - Gold prices fell 11.4% to $4,745 after reaching a peak of nearly $5,267 on January 29 [1] Market Reactions - Stocks related to precious metals, such as Hecla Mining (HL) and Newmont Corp (NEM), also experienced declines, contributing to a broader market downturn with the S&P 500, Dow Jones, and Nasdaq all falling for three consecutive weeks [2] - ETFs linked to these commodities, including the iShares Silver Trust (SLV) and SPDR Gold Shares ETF (GLD), saw significant drops of 28.6% and 10.3% respectively [6] Technical Analysis - Analysts noted that silver was trading over 100% above its 200-day moving average, indicating unsustainable price levels [5] - Gold's relative strength index (RSI) reached 84.50, while silver's RSI hit 91.13, both suggesting extreme overbought conditions that led to the selloff [5][6]