Several media reports have highlighted that US President Trump’s official announcement to nominate ex-Fed governor Kevin Warsh as the new Fed Chair is likely the driver that triggered the rampant sell-off in gold and silver due to his past remarks on his preference for a smaller US Federal Reserve’s balance sheet, which may lead to an indirect tightening of liquidity conditions.
However, the US Treasury market does not imply such a narrative that “Kevin Warsh is going to be a new hawkish Fed Chair”.
The 2-year US Treasury yield, which is the most sensitive to the Fed’s monetary policy stance, did not trade higher last Friday; instead, it dropped by 4 basis points to close lower at 3.52%, and remained below the medium-term range resistance of 3.63% in place since 30 October 2025 (see Fig. 1).
In today’s Asia session, 2 February 2026, Gold (XAU/USD) has continued to extend its losses by 9% to print an intraday low of US$4.402 at the time of writing due to a hike in metal futures margins announced by CME Group over the weekend.
COMEX gold futures margins (1oz) are raised from 6 per cent to 8 per cent, while COMEX 5000 silver futures (SI) are set to increase to 15 per cent from 11 per cent.
Hence, such increases in margin requirements are likely lead to a further unwinding of speculative long positions in Gold and Silver.
Higher capital outlays to sustain or extend long positions abruptly choked off bullish risk appetite, unleashing a cascading liquidation in Gold (XAU/USD).
Let’s now look at the short-term technical chart to decipher the near-term (1 to 3 days) trajectory