Gold and Silver Prices Plunge as Markets Reprice Fed Leadership Outlook
Precious metals retreat sharply after President Trump’s selection of Kevin Warsh as Federal Reserve chair signals shifts in monetary expectations
Gold and silver markets experienced a dramatic sell-off on Friday as investors reassessed expectations for U.S. monetary policy following President Donald Trump’s announcement of his intended nominee for Federal Reserve chair.
The retreat came after both metals hit record highs earlier in the week, reversing much of the recent rally as traders priced in a potentially stronger dollar and a changed interest-rate outlook.
Gold futures plunged by double-digit percentages from near-record levels, with spot prices falling below key psychological thresholds in volatile trading.
Silver saw even steeper declines, with prices dropping sharply from recent peaks.
The scale of the move marked one of the most significant one-day downturns for precious metals in decades, underscoring how sensitive these markets are to shifts in expectations about the direction of U.S. monetary policy.
This volatility was compounded by profit-taking after a prolonged rally that had boosted both metals to historic highs.
Traders interpreted the nomination of Kevin Warsh, a former Federal Reserve governor, as indicative of a possible shift in policy emphasis and a commitment to monetary discipline, which bolstered the U.S. dollar.
A firmer dollar typically makes dollar-denominated assets like gold and silver less attractive to international buyers, contributing to downward pressure on prices.
The U.S. Dollar Index rose in the wake of the announcement, reflecting this realignment of expectations.
Market commentators noted that much of the previous upward momentum in gold and silver had been driven by expectations of looser monetary policy and sustained demand for safe-haven assets amid geopolitical and economic uncertainties.
With the prospect of a central bank leadership perceived as more focused on stability and independence, those dynamics have shifted.
Financial markets, including major stock indices, showed signs of cautious sentiment as futures and equities reacted to the news.
The sell-off in precious metals punctuates a period of extraordinary volatility in commodity markets driven by changing investor perceptions of inflation risk, interest-rate trajectories and global macroeconomic conditions.
While long-term demand dynamics for gold and silver remain tied to traditional hedging behaviours, the latest repricing highlights how quickly broader market sentiment can shift in response to high-profile policy developments.
The retreat came after both metals hit record highs earlier in the week, reversing much of the recent rally as traders priced in a potentially stronger dollar and a changed interest-rate outlook.
Gold futures plunged by double-digit percentages from near-record levels, with spot prices falling below key psychological thresholds in volatile trading.
Silver saw even steeper declines, with prices dropping sharply from recent peaks.
The scale of the move marked one of the most significant one-day downturns for precious metals in decades, underscoring how sensitive these markets are to shifts in expectations about the direction of U.S. monetary policy.
This volatility was compounded by profit-taking after a prolonged rally that had boosted both metals to historic highs.
Traders interpreted the nomination of Kevin Warsh, a former Federal Reserve governor, as indicative of a possible shift in policy emphasis and a commitment to monetary discipline, which bolstered the U.S. dollar.
A firmer dollar typically makes dollar-denominated assets like gold and silver less attractive to international buyers, contributing to downward pressure on prices.
The U.S. Dollar Index rose in the wake of the announcement, reflecting this realignment of expectations.
Market commentators noted that much of the previous upward momentum in gold and silver had been driven by expectations of looser monetary policy and sustained demand for safe-haven assets amid geopolitical and economic uncertainties.
With the prospect of a central bank leadership perceived as more focused on stability and independence, those dynamics have shifted.
Financial markets, including major stock indices, showed signs of cautious sentiment as futures and equities reacted to the news.
The sell-off in precious metals punctuates a period of extraordinary volatility in commodity markets driven by changing investor perceptions of inflation risk, interest-rate trajectories and global macroeconomic conditions.
While long-term demand dynamics for gold and silver remain tied to traditional hedging behaviours, the latest repricing highlights how quickly broader market sentiment can shift in response to high-profile policy developments.
