Silver falls 17% in two-hours overnight

• BoE and ECB rate decisions ahead.
• AI-led selloff sees value destruction to the benefit of privately held Anthropic.
• Silver falls 17% in two-hours overnight.

A busy day for European markets, with the Bank of England and European Central Bank rate decisions set to provide further catalysts into an already volatile and unpredictable market that has seen sharp tech and precious metal declines over the past week. In Europe, the selling pressure seen for many of the US tech names has highlighted the benefits of the European indices which are often less tech-focused and more aligned with the real economy. Looking at the upcoming ECB and BoE meetings, we are unlikely to see too much in terms of interest rate adjustments from each, but the growing expectations that we could see UK inflation collapse towards the 2% target in Q2 does highlight the potential for additional easing in the second half of the year. 

This week has been characterised by significant selling pressure within the tech-space, with software companies in particular feeling pinch as investors weigh up the implications of a world where AI can easily recreate their products and services at a fraction of the cost. The fact that the source of this selling pressure is a private company highlights the dire situation where losses seen throughout the market aren’t balanced off by gains in the company that stands to benefit from the shift towards their product. In fact, the eventual multi-trillion dollar IPO’s from the likes of Anthropic and OpenAI would likely draw money out of the market as investors liquidate alternate positions to buy into these AI giants. For now, the initial concerns around software companies has spread towards the wider AI names and even companies in sectors such as data (Thomson Reuters), and ratings agencies (Moody’s). This is in stark contrast to the jitters seen at the back end of 2025 where markets were concerned with the stretched valuations attached to the Mag7 names. Instead, investors are waking up to the fact that AI will be a hugely disruptive and destructive force for many industries. With Alphabet looking to open essentially flat despite hugely impressive earnings, today’s Amazon.com numbers will likely see a much more significant move lower in the event of a disappointing release than the benefits of outperformance. 

Overnight markets saw sharp declines in the precious metals space, with silver collapsing 17% within just two-hours. Notably, that decline came during the Chinese session, highlighting the loss of confidence in a region that had previous stood as the hub of physical buying as opposed to the paper trading at COMEX. Coming off the back of the 41% drop that started around the announcement of Warsh as Trump’s Fed pick, the current declines are set against a resurgence for the US dollar. Trump for his part has disclosed that Warsh knows he wants lower rates, but markets will be cautiously waiting for the first official appearances from Warsh to make up their own mind. Notably, with gold and silver declining alongside bitcoin and the crypto coins, it appears that the haven role of precious metals has gone out the window for the time being.