The 2026 market momentum trades are experiencing a downturn, with gold, silver, and South Korea taking a hit. This year's hottest trades are now in the red, as investors worry that the Iran war might drag on longer than anticipated. Here's a breakdown of the recent price movements:
- Gold Prices Sliding: Spot gold prices are down over 5% at $5,041.81 per ounce, with gold futures dropping 5% to $5,049. Despite this, gold is still up more than 16% year-to-date.
- Silver Prices Tumbling: Silver futures are down more than 8% at $81.23 per ounce, but they remain 15% higher year-to-date.
- South Korea Plunges: The iShares MSCI South Korea ETF (EWY) plunged 14%, yet it's still up nearly 30% year-to-date.
These trades were once high-momentum plays, attracting investors seeking alternatives to U.S. large-cap tech. The S&P 500 shot up 64% over the last three years, but it's now down 1% this year. Each asset has its own allure:
- Gold: Investors believe gold's upward trend will continue as central banks diversify away from the U.S. dollar, with some predicting bullion could soon hit $6,000 per ounce.
- Silver: Expected to benefit from tight supply-demand dynamics and has significant industrial applications in AI.
- South Korea: Outperformance this year is driven by worldwide demand for memory, particularly boosting shares of Samsung Electronics and SK Hynix, which dominate the Kospi index.
However, all three trades took a hit on Tuesday as the Iran conflict intensified, sparking inflation fears and sending oil prices soaring. Brent crude oil topped $84 a barrel, while WTI crude jumped above $77. Even gold, a traditional safe-haven asset, was caught in the selling frenzy, as investors dumped assets they feared had risen too quickly.
Despite the recent downturn, these trades remain popular, with investors optimistic about their long-term potential. The market's volatility highlights the importance of staying informed and making strategic investment decisions.
