Some of the more seasoned amongst you may remember it. In the 1980s, a wave of panic swept through precious metals, triggering double-digit daily declines. The current episode is little different. It all started in China when a UBS fund invested in silver was suspended due to an excessively high premium. In response, many Chinese investors hedged against downside risk. At the same time, regulators announced higher margin requirements on futures contracts tied to the main precious metals. To avoid potential margin calls over the weekend, traders chose to unwind part of their positions, fuelling an emerging panic. To top it all off, the appointment of Kevin Warsh as Chair of the Federal Reserve reversed the trend in the dollar and amplified gold's decline.

It should be said that, amongst the contenders, Warsh is a surprising pick insofar as he is more of a hawk-one of those who favors higher rates. His appointment was therefore interpreted as a positive sign for the Fed's independence while also providing support for the dollar.

Source : Bloomberg

Technically, the Dollar Index (DXY) attempted to break down out of a congestion zone that has been in place since mid-2025. However, it has formed a positive price action pattern on weekly data at around 95.60, a level that corresponds to 1x the magnitude of the decline recorded in 2022 projected from the 2024 highs. Still, it will have to clear 97.75 to lend more credibility to a rebound towards 100, a level it will need to overcome to call an end to the dollar's bearish phase. In other words, the outcome is far from settled.

In parallel on EUR/USD, a clean close below 1.1850/30 would be needed to validate the exhaustion pattern recorded late last week and open the way for a move back towards 1.1475. Conversely, a break above 1.2090 would reignite the euro's upward momentum for the coming months.

Elsewhere, USD/JPY is nearing an intermediate resistance at 155.60 (max 156.45) for a continuation of the consolidation initiated in mid-January. USD/CHF has broken lower out of its congestion range between 0.8130 and 0.7830, with the latter now acting as upside resistance. On the commodity currency front, USD/CAD has reached the 2025 lows at 1.3535. At this stage, it seems difficult to envisage much below 1.3420, the level reached in September 2024. The same analysis applies to the aussie, which should remain below 0.7130, while the kiwi has reached-and exceeded-0.6010. Potential now appears limited to 0.6120.