Gold and Silver Prices Slide Sharply as Investors Welcome Trump’s Federal Reserve Nominee
Gold and silver prices recorded steep declines on Friday as global investors reacted to President Donald Trump’s decision to nominate former Federal Reserve official Kevin Warsh as the next chair of the US central bank. The announcement calmed fears of political interference in monetary policy, prompting a sharp sell-off in precious metals that had surged to record highs in recent weeks.
Gold, which had been trading near historic peaks, fell by as much as 10 percent during the session, dropping below the psychologically important $5,000-per-ounce mark. Silver saw even heavier losses, plunging by more than 25 percent at one point, marking one of its sharpest single-day declines in decades. The retreat followed days of intense speculation over who would succeed outgoing Federal Reserve Chair Jerome Powell, whose term ends later this year.
Market analysts said the nomination of Warsh, who previously served as a Federal Reserve governor between 2006 and 2011, reassured investors that the central bank’s independence would likely be preserved. In the weeks leading up to the announcement, concerns that Trump might appoint a more politically aligned or dovish candidate had driven investors toward gold and silver as safe-haven assets.
The US dollar strengthened sharply following the news, further pressuring precious metals. A stronger dollar typically weighs on gold and silver prices, as it makes them more expensive for holders of other currencies. Rising US Treasury yields also reduced the appeal of non-yielding assets such as bullion.
Analysts noted that the sell-off was intensified by profit-taking after an extraordinary rally in 2025, when gold gained more than 60 percent and silver surged well over 100 percent. With prices stretched and market positioning heavily skewed toward bullish bets, the Fed chair announcement acted as a trigger for a rapid unwinding of leveraged positions.
Despite the sharp drop, some market watchers cautioned that the broader outlook for precious metals remains uncertain. Ongoing geopolitical tensions, concerns about global debt levels, and long-term inflation risks could still provide support for gold and silver in the months ahead. However, in the short term, traders are expected to remain cautious as markets reassess the trajectory of US monetary policy under the expected new Federal Reserve leadership.
Financial markets more broadly showed mixed reactions, with equities stabilizing after recent volatility, while commodities linked to growth expectations also faced pressure. The dramatic move in precious metals highlighted how sensitive global markets remain to signals about US economic leadership and policy direction.
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