After a period of significant strength, precious metals have experienced a sharp pullback, contributing to increased volatility across the market. This shift has been driven by a combination of macroeconomic developments, positioning, and margin dynamics.
Following President Trump’s nomination of Kevin Warsh as the next Fed chair, gold fell by around 5%, reaching its lowest level in over two weeks, while silver declined by more than 7%. A stronger US dollar has added further pressure on precious metals and other commodities, with CME margin hikes amplifying liquidation pressure.
Periods of heightened volatility like this put significant pressure on all market participants. Sharp price moves can result in fragmented liquidity, wider spreads, and less reliable execution quality.
Neill Burger, iSAM, commented:
“The world has changed. In this environment, clients need solid and reliable counterparties that are grounded in real market dynamics. Times like this highlight those offering fantasy terms, without taking into consideration the unpredictable environment.”
The past couple of weeks have created operational and risk-related challenges for some market participants, resulting in margining and automated liquidation processes triggering unexpectedly, alongside sudden adjustments to margin requirements and NOP limits.
Volatility is part of markets, not an anomaly, and the importance of stability, reliability, and consistency is more prevalent than ever. Our focus has always been on building a robust liquidity model, designed to perform across all market conditions — not just favourable ones.
We do not rely on client losses, allowing us to provide liquidity that reflects real market dynamics, with terms and risk frameworks designed to remain stable, even throughout challenging conditions. Our institutional-grade technology, transparent risk management, and long-term approach to counterparty relationships enable us to support clients with consistency and reliability — as demonstrated over the past couple of weeks.
Clients should prioritise long-standing relationships with liquidity providers they can trust.
For further discussion on navigating volatile market conditions, contact info@isam-securities.com.
