Gold plunges after biggest drop in a decade as rally unwinds

Core Insights - Gold and silver experienced significant price fluctuations, with gold falling as much as 6.3% and silver dropping to around $75 an ounce after reaching record highs [1][2] - The recent selloff was triggered by the nomination of Kevin Warsh to lead the Federal Reserve, which strengthened the dollar and negatively impacted precious metals [3] - A crowded trade in precious metals, driven by geopolitical concerns and speculative buying, has led to extreme volatility and risk in the market [2][4] Price Movements - As of 9:21 a.m. Singapore time, gold was priced at $4,680.76 an ounce, down 4.4%, while silver declined 2.2% to $83.2965 [5] - The Bloomberg Dollar Spot Index rose 0.1% after a previous gain of 0.9%, indicating a stronger dollar [5] Market Dynamics - The surge in precious metal prices over the past year was fueled by concerns over geopolitical instability and currency debasement, with significant buying from Chinese speculators [2] - The market's volatility was exacerbated by a record wave of call option purchases, which created upward price momentum as sellers hedged their positions [4]