Major U.S. stock indices experienced a significant decline, while international gold and silver prices surged sharply. As of the close on February 23, all three major U.S. stock indices fell by more than 1%. The Dow Jones Industrial Average dropped 1.66%, the Nasdaq Composite declined 1.13%, and the S&P 500 index decreased by 1.04%.
Concurrently, international precious metals prices rose substantially. By the close on February 23, London gold prices increased by 2.52% to $5,227.43 per ounce, and London silver prices climbed 4.49% to $88.3 per ounce. The market movements were influenced by escalating tensions between the United States and Iran.
The Chairman of the U.S. Joint Chiefs of Staff cautioned that military action against Iran could entail significant risks, potentially drawing the United States into a prolonged conflict. Reports indicate that senior officials within the administration are debating how to respond to the stalemate with Iran and the consequences of various options. While some advisers are urging caution, other sources suggest a personal inclination toward launching a strike.
Later on February 23, a social media post denied reports that the Chairman opposed military action against Iran, describing the claims as "100% false." The post stated that the Chairman, like others, "does not want to see war," but believes any potential military action would be a "easily winnable" operation. The authority to decide on such action rests solely with the President, who expressed a preference for reaching an agreement but also warned that failure to do so would result in "a very bad day for that country."
In a separate development, the Israeli Prime Minister addressed the parliament, stating that Israel is facing an "extremely complex and challenging period" but is prepared for all scenarios. He explicitly warned that if Iran were to make the "gravest mistake in its history" by attacking Israel, the response would be of a magnitude "beyond their imagination." He also called for national unity and noted that the alliance with the United States has reached an "unprecedented level."
Militarily, the U.S. Navy's largest aircraft carrier, the USS Gerald R. Ford, arrived at Souda Bay on the Greek island of Crete, which hosts a NATO military base and serves as a key strategic facility for Greece, the U.S., and NATO in the Eastern Mediterranean. Additionally, several U.S. Air Force refueling and transport aircraft landed at Ben Gurion International Airport in Tel Aviv, Israel, over the past day, though it remains unclear if the stop was merely transient.
During the recent holiday period, international precious metals markets initially declined but later rebounded, influenced by U.S. economic data, geopolitical risks, and changes in U.S. tariff policies. Overall, gold and silver prices showed a strong recovery. An analyst noted that early in the period, precious metals faced pressure from a strengthening U.S. dollar and pre-holiday adjustments in equity markets. A subsequent rebound in overseas technology stocks alleviated liquidity concerns, and reassuring comments from Federal Reserve officials supported the metals' recovery. However, following the release of the Fed's January meeting minutes, the dollar strengthened again, causing precious metals to relinquish some gains. Later, a U.S. Supreme Court ruling against previous large-scale tariff policies weakened the dollar, pushing precious metals higher.
Recent U.S. GDP and inflation data have created market volatility. The U.S. economy grew at an annualized rate of 1.4% in the fourth quarter of 2025, significantly below market expectations of 2.5% and lower than the revised third-quarter figure of 4.4%. The slowdown was primarily attributed to a government shutdown and moderated personal consumption growth. On inflation, U.S. price pressures remain persistent. The Personal Consumption Expenditures (PCE) price index rose 2.9% year-over-year in the fourth quarter, up from the previous 2.8%. The core Consumer Price Index (CPI) for January fell to 2.5% as expected, marking a near five-year low. Overall, U.S. data provides mixed signals. Currently, market focus appears more centered on economic performance than inflation, though expectations for interest rate cuts have increased, providing support for precious metals prices.
Geopolitical risks have intensified. Reports indicate that an announcement regarding whether an agreement can be reached with Iran, or if the U.S. will take military action, is expected within the next ten days. A new round of negotiations between the U.S. and Iran is scheduled for February 26 in Geneva, Switzerland. Following the previous round on February 17, officials from both sides noted that despite remaining differences, progress was made compared to earlier talks, and further engagement was agreed upon. Concurrently, the U.S. has been building up military forces in the Middle East, with considerations for a "limited military strike" against Iran. Should diplomatic efforts or an initial strike fail to persuade Iran to abandon its nuclear program, a larger-scale attack in the coming months is reportedly under consideration.
Comments from Federal Reserve officials regarding potential rate cuts have been relatively moderate, but the latest Fed meeting minutes suggested a cautious stance, tempering expectations for imminent easing. One Fed official suggested that multiple rate cuts this year would be appropriate if inflation shows clear progress toward the 2% target. Another official stated there is little evidence so far that artificial intelligence is fundamentally altering the U.S. economy. While these remarks have had a calming effect, several other officials have expressed willingness to consider rate hikes if inflation remains stubbornly high—marking the first discussion of potential hikes within the Fed in nearly two years. This uncertainty regarding the future path of interest rates introduces significant fragility to the precious metals rally.
From another perspective, the primary concern for the Federal Reserve remains inflation risks. However, risk assets, exemplified by U.S. stocks, are more focused on U.S. economic growth and the sustainability of technology-related capital expenditures. As long as an environment of economic stagnation coupled with inflation in the U.S. is not clearly disproven, the synchronized performance of overseas equities with precious and base metals may persist for some time. Caution is warranted regarding risks outside the commodities market, such as vulnerabilities in the U.S. private credit sector, banking system, or among technology companies, which could trigger a sharp decline in short-term market risk appetite.
The future path of Federal Reserve interest rates may become more ambiguous. On one hand, the balance between "dovish" and "hawkish" influences among potential new Fed Board members could make it difficult to predict overall policy direction based on individual members' views. On the other hand, recent statements from the nominee for Fed Chair remain unclear, suggesting that the Fed's method of guiding market expectations might change, potentially leading to rapid shifts in market trading patterns.
In summary, geopolitical risks and macroeconomic uncertainty continue to provide core support for precious metals. However, these factors coexist with delayed expectations for interest rate cuts and profit-taking pressure. Gold and silver prices are expected to exhibit a pattern of strong, high-level volatility. Silver, due to its higher speculative nature, is likely to experience more pronounced price swings.