Fresh From the Trading Room: A Little Jittery

Why It Matters

Warsh’s nomination could tighten Fed balance‑sheet policy, strengthening the dollar and pressuring safe‑haven assets, which directly influences commodity pricing and risk‑on/off dynamics for investors.

Key Takeaways

• Gold dropped 12% after record near $5,600
• Silver fell ~30% from $120 peak
• Natural gas plunged 26% on demand forecasts
• Kevin Warsh nominated to replace Jerome Powell as Fed chair
• Dollar strengthened; gold and silver lost safe‑haven premium

Pulse Analysis

Commodity markets have entered a period of heightened jitteriness, driven by rapid price reversals in gold, silver and natural gas. The sharp corrections followed record‑setting moves earlier in the month, exposing crowded positions and fragile sentiment among traders. Such volatility is amplified by a packed calendar of U.S. macro releases—including retail sales, payrolls, CPI and GDP—plus the upcoming RBNZ rate decision, all of which can trigger swift reallocations across risk assets.

The nomination of Kevin Warsh as the next Federal Reserve chair adds a new layer of uncertainty. Warsh, known for his cautious stance on quantitative easing and emphasis on balance‑sheet discipline, is perceived as a potential dovish‑on‑growth yet hawkish‑on‑inflation figure. Market participants interpret his appointment as a signal that the Fed may resume rate cuts while simultaneously shrinking its balance sheet, a combination that tends to bolster the U.S. dollar and erode the safe‑haven premium of gold and silver. This shift already manifested in a firmer dollar and a pull‑back in precious‑metal prices.

For investors, the key watch points are Warsh’s early policy signals and the outcome of the imminent U.S. data releases. A continued narrative of rate flexibility paired with balance‑sheet restraint could keep the dollar resilient and limit further rebounds in gold and silver. Conversely, any hint of renewed asset purchases or Fed independence concerns could revive the debasement hedge, reigniting demand for precious metals. Traders may also consider tactical exposure to copper, which remains in an uptrend, and soybean oil, which has completed a bullish cup‑and‑handle pattern, as alternative avenues amid the broader market turbulence.

Fresh from the Trading Room: A little jittery

By Inspirante Trading Solutions Pte Ltd (“ITS”) · 10 Feb 2026

The opinions expressed in this report are those of Inspirante Trading Solutions Pte Ltd (“ITS”) and are considered market commentary. They are not intended to act as investment recommendations. Full disclaimers are available at the end of this report.

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Upcoming economic events (Singapore Local Time)

| Date | Time | Event |

|------|------|-------|

| 2026‑02‑10 | 21:30 | U.S. Retail Sales (Dec) |

| 2026‑02‑11 | 21:30 | U.S. Nonfarm Payrolls (Jan) |

| 2026‑02‑13 | 21:30 | U.S. CPI (Jan) |

| 2026‑02‑16 | 07:50 | JP GDP (Q4) |

| 2026‑02‑18 | 09:00 | RBNZ Interest Rate Decision |

| 2026‑02‑20 | 21:30 | U.S. Core PCE Price Index (Dec) |

| 2026‑02‑20 | 21:30 | U.S. GDP (Q4) |

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Market snapshots

Figure 1: Euro FX futures (Weekly)

Euro FX has rallied to the upper boundary of a decade‑long descending channel, a level that has capped upside attempts for years. The dollar’s next move will likely help determine whether this becomes a breakout, or a rejection that keeps price contained within the channel.

Figure 2: Gold, Silver and Natural Gas futures

Gold and silver surged into late January before reversing sharply, while natural gas saw an abrupt repricing as near‑term fundamentals shifted. The swings have been unusually large by historical standards.

Figure 3: Copper‑gold ratio (Weekly), Copper futures (Weekly)

While gold and silver have been far more volatile in recent weeks, copper has continued to trend higher in a steadier fashion. The copper‑gold ratio is now testing a long‑term support line, which has generally marked the next leg higher for copper prices.

Figure 4: Soybean Oil futures

Soybean oil has completed a cup‑and‑handle pattern, with prices breaking out higher.

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Beyond the charts

The past two weeks have been defined by sharp, fast moves across commodities. Gold fell as much as 12 % intraday after hitting a fresh record near $5,600, while silver dropped roughly 30 % from its peak above $120 before finding its footing. At the same time, U.S. natural gas saw a one‑day decline of about 26 % as forecasts shifted warmer and the market quickly repriced near‑term heating demand. Taken together, markets have been jittery, with crowded positioning and fragile sentiment.

A potential stabilising development has been President Trump’s announcement of his intent to nominate Kevin Warsh to succeed Jerome Powell as Fed chair. Markets view Warsh as a familiar figure, having served on the Fed’s Board of Governors from 2006 to 2011. His record reflects a history of taking inflation risks seriously, a perspective forged while navigating the financial crisis. He supported aggressive crisis measures when needed, but was also vocal about not leaving “emergency” settings in place for too long. That included long‑standing scepticism toward repeated rounds of quantitative easing and heavy reliance on forward guidance.

While it is still early to tell, the market’s working assumption is that Warsh could be open to rate cuts if growth needs support, but would also prefer a smaller Fed balance sheet over time. Reuters noted that investors see balance‑sheet restraint as supportive for the dollar because it reduces liquidity in the system. In rates, the initial response also looked like a steeper curve. The front end reflected expectations that cuts may be coming, while the long end suggested less confidence that the Fed will keep long‑term borrowing costs suppressed indefinitely.

This ties directly into the “debasement” narrative that helped drive the precious‑metals spike. When investors worry that policy will become structurally easier—whether through political pressure, renewed asset purchases or a perceived loss of central‑bank discipline—the dollar tends to weaken and gold tends to benefit. The Warsh nomination initially pushed back on that fear: the dollar firmed as traders priced out the risk of a much more aggressively dovish Fed chair, while gold and silver lost some of their safe‑haven premium.

From here, the key watch points are straightforward: the confirmation process and Warsh’s early signalling on inflation and the balance sheet. If markets continue to read this as rate flexibility paired with balance‑sheet discipline, the dollar will likely stay better supported and gold may struggle to rebuild its debasement premium, leaving prices biased lower or range‑bound after the recent volatility. If the debate swings back toward concerns over Fed independence or a return to large‑scale asset purchases, the debasement hedge can come back just as quickly.

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A hypothetical guide: From ideas to application

We conclude with the following hypothetical trades:

Case study 1 – Long Copper futures

If one holds a bullish view of copper, one could consider a long position in Copper (HG) futures at the current price of $5.8505, with a stop‑loss below $5.4505 (maximum loss ≈ 0.4 points). As shown in Figure 3, copper has historically tended to rally following major lows in the copper‑gold ratio. Based on that relationship, copper has, in prior cycles, advanced by roughly 29 % to 132 % from such ratio lows.

A hypothetical 20 % move higher from current levels would bring prices to $7.0206, a gain of 1.1701 points. Each point move in the Copper futures contract is worth $25,000. The Micro Copper (MHG) contract is also available at 1/10 the size of the benchmark contract.

Case study 2 – Long Soybean Oil futures

If one holds a bullish view of soybean oil, one could consider a long position in Soybean Oil (ZL) futures at the current price of $55.81, with a stop‑loss below $48.40 (maximum loss ≈ 7.41 points). Looking at Figure 4, the completion of the cup‑and‑handle pattern could mean that soybean oil has the potential to rise to $69.10, a gain of 13.29 points. Each point move in the Soybean Oil futures contract is worth $600. The Micro Soybean Oil (MZL) futures contract is also available at 1/10 the size of the standard contract.

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About Inspirante Trading Solutions Pte Ltd (“ITS”)

ITS was incorporated in Singapore in July 2020. Founded by the partners of Synergy Link Capital Pte Ltd (“SLC”) to consolidate their initiatives in FinTech solutions, research, and training programs for different market participants, while SLC continues its focus in proprietary trading. ITS provides bespoke trading solutions such as algo‑trading systems, risk‑management systems, research reports, education, and training courses. Within two months of incorporation, ITS obtained FinTech certification recognised by the Monetary Authority of Singapore and now collaborates with various trading groups, exchanges, and brokers worldwide.

The trainers and researchers at ITS regularly speak at exchange‑hosted seminars and write for research publications. Their mission is to bridge the gap between theoretical and practical aspects of derivative trading, offering guidance from seasoned, active traders.

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