Geopolitical Risk Sparks a “Metal Mania,” Silver Breaks Above $100 for the First Time

Market Overview

Last Friday, escalating geopolitical risks and renewed trade tensions weighed on U.S. equities. While the S&P 500 managed to extend its gains for a third consecutive session, it still recorded its first two-week losing streak in seven months. The Dow Jones Industrial Average declined, dragged down by heavyweight constituents such as Goldman Sachs.

Intel plunged 17% in a single session, marking its steepest drop in 17 months, after issuing first-quarter guidance that fell sharply below expectations. In contrast, Nvidia notched its third straight daily gain, highlighting continued divergence within the tech sector. Apple remained under pressure, extending its losing streak to eight consecutive weeks, the longest since 2022.

Currency markets experienced a dramatic bout of volatility.

Yen reversal shock: The Japanese yen briefly weakened past 159 per dollar before staging a violent rebound, reportedly driven by suspected government intervention. The yen surged back above 156, posting its largest single-day gain since August last year.

Dollar slump: The U.S. Dollar Index fell 1.8% for the week, its worst performance in eight months. The offshore yuan strengthened past 6.95, reaching a two-year high.

Cryptocurrencies: Bitcoin rebounded toward $91,000 before retreating, while Ethereum tumbled more than 10% on the week.

Commodities entered full-blown “risk-off frenzy” mode.

Metals hit historic milestones: Heightened geopolitical tensions fueled massive safe-haven inflows. Spot silver surpassed $100 per ounce for the first time ever, with year-to-date gains exceeding 40%. Gold climbed toward the $5,000 threshold. LME tin surged 9.5% to a fresh record high, while nickel rose more than 4%.

Energy prices surged: A polar cold wave sweeping across the U.S. sent natural gas prices soaring 70% for the week. Crude oil advanced over 3%, extending its rally to a fifth consecutive week on rising safe-haven demand. In Europe, Frances prime minister survived a no-confidence vote, easing sovereign risk concerns. As a result, the yield spread between French and German government bonds narrowed to its lowest level in 18 months.

Key Themes to Watch

● Yen surges in two sharp waves within a single day

During Friday‘s European trading session, the yen broke below 159 per dollar and moved toward 160, widely viewed as a policy red line following Japan’s 2024 interventions. It then abruptly reversed course and turned higher. During U.S. trading hours, gains expanded to as much as 1.75%, erasing losses accumulated since Christmas.

Markets suspect Japan‘s Ministry of Finance conducted a rate-check operation, typically interpreted as a warning signal to currency traders. Subsequent media reports, citing market participants, noted that the yen’s surge coincided with the New York Fed contacting financial institutions to inquire about yen exchange rates. Wall Street interpreted this as a potential sign that the Federal Reserve was prepared to assist Japanese authorities in direct market intervention to support the yen.

● U.S. January S&P Global Manufacturing PMI

The U.S. January S&P Global Manufacturing PMI edged slightly higher than December, while the Services PMI remained unchanged. Both readings, however, came in below market expectations. Overall business activity continued to expand in January, but at a noticeably slower pace compared with the more robust growth seen in the second half of 2025.

Manufacturing activity outperformed services, yet underlying order growth in both sectors has shown signs of deceleration, suggesting that forward momentum may continue to soften.

Data to Watch (GMT+8)

21:30 (US) – U.S. November Durable Goods Orders (MoM)

23:30 (US) – U.S. January Dallas Fed Manufacturing Activity Index