London, 2 February 2026 — European share markets started the trading week on the defensive on Monday as commodities and risk assets slid sharply, driven by deep declines in precious metals, energy prices and growing investor uncertainty over global monetary policy, market positioning and Fed leadership choices.
The pan-European STOXX 600 index retreated, reflecting broad risk aversion among investors who are bracing for what analysts describe as a volatile start to February amid a complex mix of macroeconomic data, central bank actions and shifts in investor sentiment.
Stocks and Sector Movements
Markets across Europe were broadly weaker on the opening session:
- Major indices such as Germany’s DAX, France’s CAC 40 and the UK’s FTSE 100 slipped as traders reacted to continued commodity price weakness and earnings updates.
- The basic resources sector, which includes miners and commodity producers, recorded some of the heaviest losses owing to plunging metal prices and concerns about demand.
- Some defensive sectors, such as food and beverages, found mild support as investors rotated out of risk assets.
Precious Metals and Commodities Under Pressure
Gold and silver, both of which recently reached multi-year highs amid safe-haven demand, experienced abrupt price corrections:
- Gold prices fell sharply, extending last week’s steep sell-off after investors reassessed expectations around future monetary policy direction and profit-taking pressures increased.
- Silver also remained under pressure, deepening its sell-off following last Friday’s dramatic collapse that wiped away a large portion of its recent gains.
Falling prices for these key commodities have fed into equity market volatility, as traders unwind leveraged positions and reassess risk assets in light of tighter market conditions and shifts in the U.S. dollar outlook.
In addition to precious metals, crude oil prices also weakened, pressured by easing geopolitical risk factors and broader demand concerns.
Cryptocurrencies Follow Risk Assets Lower
Cryptocurrencies, which often mirror risk sentiment in broader financial markets, also felt the pain:
- Bitcoin continued its slide, breaking below key technical levels and marking extended losses in recent sessions as traders grew cautious over macroeconomic headwinds and shifts in liquidity conditions.
The slide in Bitcoin underscores how sharp movements in traditional financial markets, including precious metals and equities, can spill over into digital assets amid heightened uncertainty.
What’s Driving the Downturn?
Market experts point to several factors contributing to the downdraft in European and global markets:
- Monetary policy expectations shifted sharply after speculation over leadership at the U.S. Federal Reserve sparked concerns that future policy may be less accommodative than previously anticipated, pushing investors to rethink positions in safe havens and interest-rate-sensitive assets such as gold and bitcoin.
- Commodity sell-off dynamics, including margin requirement increases by major futures exchanges, have forced traders to liquidate positions, adding to downward price momentum in metals and other commodities.
- A heavier calendar of central bank decisions, corporate earnings and economic data releases this week has also heightened trader caution, prompting some market participants to adopt defensive positioning until clearer signals emerge.
Global Market Ripple Effects
The European market slump mirrors broader global trends, where key Asian markets and U.S. equity futures also reflected investor risk aversion, reinforcing the sense of synchronized market pressure at the start of the week.
Despite the sharp moves, some analysts caution that current volatility may reflect short-term technical adjustments, including profit-taking and de-leveraging, rather than a fundamental shift in long-term market direction. However, the configuration of macroeconomic data, central bank policy cues and geopolitical developments will be critical in determining how markets evolve over the near term.
