Commodities markets slumped on Monday, led by deep losses in gold, silver, oil and industrial metals as the choice of Kevin Warsh as the next Fed chair set off a wave of selling in risk assets that sent precious metals tumbling for a second session.

Gold slid 9% to its lowest in more than two weeks, while silver fell more than 13% after both metals hit records last week.

“The decision by markets to sell precious metals alongside US equities suggests investors view Warsh as more hawkish,” said Vivek Dhar, a commodities strategist at Commonwealth Bank of Australia (CBA).

“A stronger US dollar is also adding pressure on precious metals and other commodities, including oil and base metals,” added Dhar who is sticking with a gold price forecast of $6,000 in the fourth quarter, however.

On Friday, US President Donald Trump chose Warsh, a former governor of the Federal Reserve, to succeed Jerome Powell as head of the central bank in May, sparking selling across stock and commodities markets, while lifting the dollar.

Asian shares followed Wall Street futures deep into the red as chaotic selling in precious metals made for a nervous start to a week packed with corporate earnings, central bank meetings and economic data.

ACCELERATED SELLING

Selling in precious metals accelerated as CME Grou hiked margins on its metal futures with effect from Monday’s market close.

An increase in margin requirements is generally negative for affected contracts, as the higher capital outlay can dampen speculative participation, reduce liquidity, and push traders to unwind positions.

The decline began on Friday, with the steepest one-day drop in spot gold since 1983, for a fall of more than 9%, while silver plunged 27% in its largest daily decline on record.

Prices in energy markets came under pressure on Monday from signs of de-escalation in US-Iran tension after Trump’s weekend comments that Iran was “seriously talking” with Washington, easing fears of conflict with the OPEC member.

Those comments, along with reports that the naval forces of Iran’s Revolutionary Guards have no plans for live-fire exercises in the Strait of Hormuz, are signs of de-escalation, said IG market analyst Tony Sycamore.

Copper and iron ore markets faced headwinds amid worries over high inventories and subdued demand in the run-up to this month’s Lunar New Year break in China, the world’s biggest buyer of industrial and bulk metals.

The end-user demand and transactions are expected to be sluggish before the holiday, which starts on February 15, analysts said.

In other commodities, Tokyo rubber fell nearly 3% while Chicago wheat and soybeans were down about 1%.

“The key question is whether this marks the start of a structural downturn in commodity prices or merely a correction,” said CBA’s Dhar.

“We see it as a correction and a buying opportunity rather than a fundamental shift.”