Metals selloff sends shockwaves through global markets

​​​Crowded positions unwind sharply

​Gold fell 5% on Monday to its lowest level in over two weeks, while silver dropped more than 7%. Both metals had hit record highs last week before the sharp reversal began on Friday.

​Last week's surge in precious metals proved too crowded, with the Monday selloff demonstrating what happens when too many traders pile into the same positions. The subsequent unwinding was swift and brutal.

Copper declined 3% on the London Metal Exchange. Crude oil fell nearly 5%, retreating from multi-month highs. The declines affected multiple commodity markets simultaneously.

​Friday saw the steepest one-day drop in spot gold since 1983, with a fall of more than 9%. Silver plunged 27% in its largest daily decline on record.

​Mining stocks post heavy losses

United Kingdom (​UK)-listed miners recorded substantial declines. Endeavour Mining fell about 12%, Fresnillo dropped close to 10%, Antofagasta shed as much as 8%, and Anglo American declined over 4%.

​Smaller mining stocks saw even larger percentage moves. Tullow Oil fell up to 16%, Atalaya Mining dropped 21%, and Pan African Resources declined around 12%.

​CME Group raised margin requirements on metal futures, effective from Monday's market close. Higher margin requirements increase the capital traders must post, which accelerated the position unwinding.

​FTSE 100 falls less than European peers

​The FTSE 100 fell around 0.3% to 0.6% on Monday. Defensive names including Unilever, AstraZeneca and British American Tobacco (BAT) performed better than the broader market.

​The STOXX 600 slipped about 0.7%. Technology stocks including ASML and Infineon declined alongside miners and energy firms.

​The AIM 100 dropped as much as 2%, its worst fall since November. The small-cap index has heavier exposure to mining stocks than the FTSE 100.

​Banks advanced ahead of this week's Bank of England (BoE) meeting. Defence stocks also rose following signals of renewed UK-European Union (EU) cooperation.

​Oil prices drop on US-Iran comments

​Crude oil prices fell nearly 5% after Trump said over the weekend that Iran was seriously talking with Washington. Reports indicated that Iran's Revolutionary Guards have no plans for live-fire exercises in the Strait of Hormuz.

Shell and BP declined as oil prices fell. The moves in energy stocks contributed to the broader market weakness.

​Analysts viewed these developments as signs of de-escalation in United States (US)-Iran tensions. About one-fifth of global oil consumption passes through the Strait of Hormuz.

​Markets had pushed crude to multi-month highs partly on concerns about potential supply disruptions. The weekend comments reduced these fears and removed a risk premium from oil prices.

​UK economic data shows improvement

​UK business confidence rose to its highest level in eight months. House prices increased 0.3% in January, according to data released Monday.

​The positive domestic data helped explain why the FTSE 100 held up relatively well despite the commodity market turmoil. The UK economy showed underlying momentum even as global factors created turbulence.

​Banks benefited from expectations that interest rates might remain elevated for longer. This supported the financial sector even as commodity-linked stocks declined sharply.

​Defence stocks drew renewed attention following signals of closer UK-EU cooperation. This added another layer of sector rotation beneath the surface volatility.

​Other commodity markets decline

​Tokyo rubber fell nearly 3%. US/ Chicago wheat and soybeans were down about 1%.

​Copper and iron ore markets faced pressure from concerns over high inventories and subdued demand before this month's Lunar New Year break in China. The holiday starts on 15 February 2026.

​End-user demand and transactions are expected to be sluggish before the holiday, according to analysts. China is the world's biggest buyer of industrial and bulk metals.