Gold and Silver Plunge Amid Federal Reserve Shakeup

Gold and silver prices fell sharply due to higher margin requirements and the nomination of Kevin Warsh as Federal Reserve chair. Spot gold dropped 3%, while silver fell 3.3%. Despite the selloff, analysts suggest it's not a sustained downturn. Meanwhile, the dollar index gains added pressure.

Gold and silver prices continued their downward trajectory on Monday, exacerbated by increased margin requirements from CME Group. This decline follows last week's sharp selloff triggered by Kevin Warsh's nomination as the next Federal Reserve chair.

Spot gold decreased by 3% to $4,718.35 an ounce, having tumbled nearly 10% earlier on. U.S. gold futures for April remained stable at $4,740.90 per ounce. Meanwhile, the bullion market saw a 9.8% drop last Friday, with gold losing about $900 from its January 29 peak of $5,594.82, eroding much of this year's gains.

Spot silver also suffered, falling 3.3% to $81.75 an ounce. Despite the sharp declines, analysts like Deutsche Bank's Michael Hsueh suggest this isn't indicative of a prolonged downturn, as investor interest remains. CME Group announced increased margin requirements for precious metals futures effective post-Monday close, further influencing the market.

(With inputs from agencies.)