Reuters, Feb 2 — Gold and silver extended their selloff on Monday after the CME Group raised margin requirements, compounding last week’s sharp decline linked to the nomination of Kevin Warsh as the next Federal Reserve chair. By 11:00 a.m. ET spot gold was down 5.2% at $4,613.99 an ounce, having tumbled nearly 10% earlier in the session; silver also fell as volatility rose across precious metals markets.

  • Spot gold: $4,613.99/oz (down 5.2% by 11:00 a.m. ET)
  • Earlier session move: nearly 10% intraday decline
  • Driver: CME Group raised margin requirements; market reaction to Kevin Warsh nomination
  • Date & source: Feb 2, Reuters (Anmol Choubey)
  • Market focus: US precious‑metals and jewellery sector

Context: what this means for bullion and jewellery in 2026

The immediate market shock is rooted in higher margin calls at the CME and a repositioning of rate expectations after the Fed‑related nomination. That combination amplified an already sharp liquidation in futures and spilled into the physical market. For the jewellery trade, the move translates into sudden cost volatility: the unit cost of yellow metal backing inventory has shifted materially within hours, tightening margins on pieces priced on a moving gold reference.

Jewellery buyers and suppliers work with tactile materials — from satin‑finished 14k chains to substantial, heavy‑weight gold bangles — where metal costs represent a meaningful portion of finished‑goods value. Rapid price swings raise the risk of inventory re‑pricing, wider bid‑ask spreads from metal dealers, and compressed margins on knife‑edge shank designs or high‑carat items where melt value is a primary input.

Impact: how US retailers, wholesalers and investors should respond

For US retailers and wholesalers the immediate actions are operational. Merchants with exposure to inventory priced against daily gold benchmarks should review pricing clauses with suppliers, confirm hedging positions where used, and re‑assess markdown tolerance on metal‑heavy SKUs. Online and catalog players that hold fixed‑price orders may face fulfilment cost gaps as spot benchmarks move intra‑day.

Wholesale buyers should expect tighter liquidity as counterparties demand higher margins; that can widen turnaround times for spot purchases and increase financing costs. Investors monitoring jewellery groups or bullion intermediaries will read the move as heightened execution risk rather than a structural demand collapse — the catalyst was margin policy and policy risk, not a change in consumer tastes.

Reporting: Anmol Choubey/Reuters, Feb 2.

Image Referance: https://www.msn.com/en-us/money/markets/gold-silver-extend-fall-as-cme-margin-hikes-compound-sharp-selloff/ar-AA1VvD6q