Gold and Silver Markets Face Volatility as Physical Supply Issues Emerge

Gold prices plummeted 5% in a single day after reaching record highs, with the metal dropping to $4,115 from its peak of $4,379. The sell-off was triggered by President Trump's comments on China tariffs and subsequent U.S.-China trade talks, which reduced safe-haven demand. Despite the correction, Gold remains up over 50% year-to-date, underscoring the structural volatility in physical metals markets.

Silver markets faced even sharper swings, surging 80% before a 4% pullback. The Royal Mint warned of delivery delays as retail demand overwhelmed production capacity. London's institutional silver market experienced historic squeeze conditions, exposing critical supply shortages.

These dramatic moves highlight the fragility of traditional precious metals markets—a vulnerability that tokenized alternatives aim to address. The physical supply crisis in silver, coupled with gold's tariff-driven volatility, reinforces the case for blockchain-based solutions in commodity trading.