A key driver of Canada\u2019s outperforming stock market over the past year \u2013 gold and silver \u2013 slammed into reverse on Friday, dragging the benchmark down nearly 1,100 points in the biggest selloff since last year\u2019s Liberation Day volatility.<\/p>\n
The turbulence followed the announcement that U.S. President Donald Trump picked former Federal Reserve governor Kevin Warsh<\/a> as the next chairman, which eased concerns about inflation and central bank independence.<\/p>\n That may be good news for the U.S. economy over the longer term, but not so good for precious metals that had soared to record highs earlier this month as investors sought popular havens from unpredictable U.S. policies.<\/p>\n Now, these gains are unwinding in a big way.<\/p>\n The price of gold fell as low as US$4,700 an ounce, down more than US$650, at its lowest point during the day. That put it well under the US$5,000 threshold that had been heralded as an indicator of rising investor queasiness over U.S. economic and geopolitical policies as recently as this week.<\/p>\n Silver, which had also been on a tear as a safe haven asset with industrial applications, fell 28 per cent.<\/p>\n The S&P\/TSX Composite Index, which has a large exposure to global precious metals producers, closed at 31,923.52, down 1,092.61 points or 3.3 per cent, ending its longest monthly winning streak since 2017.<\/p>\n Barrick Mining Corp. and Agnico Eagle Mines Ltd., two of the biggest gold producers, fell more than 10 per cent each, challenging a bull market run that had doubled the price of some companies in the sector over the past 12 months.<\/p>\n Other commodity producers were hit as well, suggesting a full-on retreat from stocks that had served investors well in recent months: uranium producer Cameco Corp. fell 6.6 per cent, copper producer Lundin Mining Corp. fell 7.6 per cent and the energy sector fell 1 per cent.<\/p>\n Market volatility wasn\u2019t confined to Canada, though. <\/p>\n In the U.S. the broad S&P 500 fell 0.4 per cent, with the technology sector and materials suffering some of the biggest declines. <\/p>\n The 30-stock Dow Jones Industrial Average was down as much as 600 points earlier in the day, before regaining some lost ground in the afternoon.<\/p>\n While head-spinning U.S. tariffs and Mr. Trump\u2019s designs on Greenland may have rattled the stock market this month and near the start of Mr. Trump\u2019s second term in office, this dip appeared related to a presidential move that was widely applauded \u2013 simply because it resets expectations monetary policy as the year grinds on.<\/p>\n