Editor’s Note
This article examines the extreme volatility in precious metals markets during January, driven in large part by frenzied retail investment activity in China. The dramatic swings in silver and gold prices highlight both speculative fervor and the interconnected nature of global commodity markets.
The silver price had shot up to an all-time high of $122 per ounce – only to crash by over 30% by the end of the month. The price of gold per ounce broke through the $5,500 mark for the first time before the correction. Even higher prices were paid in Shanghai; at times, silver traded there at a premium of around $30 per ounce. The mania among Chinese retail investors was likely the most important driver of the global volatility in precious metals prices.