Hedge funds sharply reduced their bullish exposure to silver in late January, cutting net-long positions to the lowest level in almost two years as sentiment towards precious metals deteriorated ahead of a steep market sell-off, according to a report by Bloomberg citing CFTC data.

The figures show that hedge funds and other large speculators slashed net-long silver positions by 36% to 7,294 contracts in the week ended 27 January. The reduction left positioning at a 23-month low, underscoring a broad pullback in conviction across the silver market.

The cutbacks came in the run-up to one of silver’s sharpest price declines in decades, with precious metals selling off sharply on Friday. Gold positioning was also pared back, with net-long bets falling to an eight-week low over the same period.

The move followed heightened macro uncertainty after US President Donald Trump nominated Kevin Warsh as the next chair of the Federal Reserve, a development that triggered a reassessment of the future path of US monetary policy. Expectations that a more hawkish policy stance could persist weighed on interest-rate sensitive assets, including gold and silver.