[MARKET ANALYSIS] Metals rebound slightly as traders continued to take profits from the crowded bull rally

• Precious metals continue to slide, with spot gold and silver falling as much as 10% and 16%, respectively. The initial selloff was initiated early last Friday on the possibility (and then confirmation) of Kevin Warsh being announced as the new Fed Chair. This pick was seen as hawkish compared to the other candidates for the role. Traders positioned long saw this as an opportunity to take profits, with gold and silver being up as much as 30% and 70% respectively YTD.
• During the APAC session, XAU steadily trended lower as Chinese participants took the opportunity to lock in profits, falling just shy of USD 4400/oz. As the European session continues, the yellow metal continues to rebound and is returning back to USD 4700/oz; but ultimately, remains lower by over 4%. Similarly, after falling to a trough of USD 71.40/oz, silver prices have rebounded to USD 80/oz.
• Despite the recent selloff, Deutsche bank still sees spot gold at USD 6,000/oz in 2026.
• Alongside precious metals, 3M LME Copper gapped below USD 13k/t and drove to a low of USD 12.43k/t, weighed on by the broader risk-off tone and weak Chinese PMIs. Copper prices remain below USD 13k/t but have recently rebounded just shy of session highs of USD 12.95k/t.

The recent pullback in precious metals is largely driven by profit-taking, following a significant rally, particularly after the hawkish appointment of Kevin Warsh as Fed Chair. Although both gold and silver have seen a minor rebound in the European session, they remain lower, reflecting a risk-off sentiment exacerbated by weak Chinese economic indicators impacting base metals like copper. Overall, the market is adjusting to new monetary policy expectations while still maintaining a bullish long-term outlook on metals.