Barclays(US:BCS) Hua Er Jie Jian Wen·2026-02-02 13:03Core Viewpoint - The recent surge in trading of metal and mining stocks has abruptly halted due to a significant sell-off triggered by a rebound in the US dollar, highlighting the volatility that can arise from speculative retail investor participation [1][2]. Group 1: Market Dynamics - Retail investors injected approximately $171 million into the iShares Silver Trust (SLV) on Thursday, marking the largest single-day net inflow for this group [1]. - Following the nomination of a hawkish candidate for the Federal Reserve chair, the dollar strengthened, leading to a sharp decline in precious metal prices, with gold dropping 9% and silver plummeting over 20% on the same day [2][6]. - The iShares Silver Trust experienced its largest drop since its inception in 2006, while the NYSE Arca Gold Miners Index faced its worst decline since 2008 [2]. Group 2: Retail Investor Behavior - The increasing participation of retail investors, characterized by a pursuit of short-term gains and erratic positions, raises concerns about further market volatility [6]. - The SLV fund became the second most actively traded asset on Interactive Brokers, with its trading activity doubling compared to the previous week [6]. - Retail investors have shown a strong interest in the metal and mining sector, with eight new stocks from this sector added to Jefferies LLC's basket of popular retail stocks [7]. Group 3: Institutional Investor Perspective - Despite the downturn in precious metals, some institutional investors view the sell-off in industrial metals as a buying opportunity, citing potential catalysts such as AI infrastructure development and government fiscal expansion [8]. - Barclays noted that the Bloomberg Industrial Metals Index has risen approximately 30% from recent lows, but this is still below the average 170% increase seen in metal rebound cycles since the 1990s [8]. - The current market dislocation presents a unique opportunity for value-seeking investors, particularly in industrial metal stocks compared to the crowded precious metal sector [8].