Gold prices (GC=F) have been plunging as the precious metal kicks off the first trading week of February below $4,800 per ounce. Currently, silver (SI=F) hovers above $81.

Sevens Report Research founder Tom Essaye and Yahoo Finance Senior Reporter Ines Ferré comment on the recent bout of volatility working its way through precious metals commodities.

To watch more expert insights and analysis on the latest market action, check out more Opening Bid.

00:00 Brian

Tom, coming over to you here. Your thoughts on this these moves in precious metals. Feels like I just talked to you and prices were going sky high, now they’re completely collapsing.

00:10 Tom

Good morning, Brian. Thank you very much for having me on. Yeah, I mean the the dam broke to a point, right? I mean, I think anybody could realize that the parabolic moves we were seeing, you know, last week and then really for most of this month, were not sustainable, okay? And it was going to take some sort of a catalyst to reverse it. When it reversed, it was going to tumble. That’s the way metals are. That’s what everybody has to understand if you’re going to trade them.

00:36 Tom

The catalyst always seems to be a surprise, and it was last week with Warsh being nominated as the Fed chair. Now, he isn’t hawkish by any means, but he does have some unknowns attached to him regarding QE and sort of Fed staffing. and that was the catalyst we needed. The dollar firmed, and all these weak late hands in gold and silver ran for the exits, and then down it goes.

00:58 Brian

Tom, you know me, I still love my uh investing jargon, so I’m going to dip into my bag of tricks here. Uh, do you try to catch a falling knife in gold and silver here?

01:07 Tom

No, I don’t think so. I think you can wait a little bit longer. I mean, in the end, these things got very stretched. I mean, the the moves, especially in silver last week. I mean, they they were they were truly sort of historic and I’ve been watching silver for 20 plus years. I think that there’s more froth to come out of this. I think at some point, certainly they they will be interesting, but I think you can be a little bit patient. You know, the best way to do it is if you’re itching, just buy a little, right? Then let it come in, buy a little more and kind of build the position over time. That way you’re not trying to to pick a spot, catch a knife on a very volatile asset.

01:40 Brian

Uh Inez, I learn something new every day in market. Today I learned that the Chinese call silver the Devil’s medal. I had no idea about that. but uh wow, you’ve been covering this move all the way higher in these medals and now you’re covering them all the way down.

01:55 Inez

Yeah, and a dramatic way down and especially when you take a look at gold, which is such a large, uh has such a large market cap and the the dramatic fall that we saw in both of them. But as Tom was saying, yes, it was a parabolic move. And there were plenty also of strategists that were warning about that parabolic parabolic move. I will say though, JP Morgan came out with a note just yesterday, basically saying, stay the course on gold, looking at gold.

02:22 Brian

Oh, of course. Who comes out with that crap, Inez? I mean, of course.

02:25 Inez

Yeah, they’re coming out with a year end price target of $6,300 for gold. Basically saying, central bank demand, investor demand for gold. On silver, they’re actually saying that the price floor, they see it between 75 and 80. So they don’t see silver pulling back as much or losing all of its gains, uh that it’s made, but silver certainly has been the one that has been most parabolic uh out of those two.

02:51 Brian

I’m glad you mentioned that Inez, because Deutsche Bank out this morning, uh staying uh true to their $6,000 an ounce call on gold.

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