Market News
Gold and Silver tumble as Trump’s Fed Chair pick Warsh seen as preserving central bank independence
Gold and silver prices plunged on Friday, as President Donald Trump’s nomination for the next chair of the Federal Reserve, Kevin Warsh, appeared to relieve concerns about the central bank’s independence.
By 7:12 a.m. ET, spot silver was down 10.6% to settle at around $103.81 an ounce, paring back earlier losses. In the early hours of the morning, the metal had plummeted as much as 16% and dipped below the $100 milestone.
Prices of the precious metals also faltered on futures exchanges, with front-month gold contracts losing 3.4% in New York, while silver futures for February delivery were down by 10%.
The sell-off gripped the wider precious metals market, with spot platinum down more than 10%, while palladium fell close to 8%.
On Friday, Trump named Warsh — who served at the central bank during the 2008 Financial Crisis — successor to current Fed Chair Jerome Powell.
National Economic Council Director Kevin Hassett had been the favorite to replace Powell for some time, but Warsh became the front runner in prediction markets in recent days.
In a note on Friday morning, Evercore ISI’s Krishna Guha said the market was “trading Warsh hawkish.”
“The Warsh pick should help stabilize the dollar some and reduce (though not eliminate) the asymmetric risk of deep extended dollar weakness by challenging debasement trades – which is also why gold and silver are sharply lower,” he said.
“But, we advise against overdoing the Warsh hawkish trade across asset markets – and even see some risk of a whipsaw. We see Warsh as a pragmatist not an ideological hawk in the tradition of the independent conservative central banker.”
Claudio Wewel, FX strategist at J. Safra Sarasin Sustainable Asset Management, told CNBC’s “Squawk Box Europe” on Friday that a “perfect storm” of geopolitical tensions had helped precious metals move higher this year, pointing to the U.S. capture of Venezuelan President Nicolas Maduro and Washington’s threats to use military force in Greenland and Iran.
More recently, he said, speculation over who would be nominated as the next Fed chair had been influencing metal markets.
“The market has clearly been pricing the risk of a much more dovish contender, that’s been largely helping the gold price along with other precious metal prices. Over the last 24 hours, the news flow has changed a little bit,” Wewel said, prior to Trump’s announcement.
‘Even good assets can sell-off’
Gold and silver both enjoyed record-smashing rallies in 2025, surging 65% and 150%, respectively, over the course of the year. Those gains have largely continued into 2026, with silver adding 45% while gold is up 19% year-to-date.
On stock exchanges across the globe, the impact of the metals sell-off was visible on Friday. In Europe, the regional Stoxx 600 Basic Resources index — which includes the continent’s most valuable mining companies — was 2% lower in afternoon trading.
London-listed Fresnillo, the world’s biggest silver producer, was last seen 4% lower, paring earlier losses.
In pre-market trade on Wall Street, silver miner Endeavour Silver was down 9%, while Coeur Mining lost 8%. Silver ETFs were dragged into the action, with the ProShares Ultra Silver fund last seen more than 22% lower ahead of the opening bell. The iShares Silver Trust ETF lost 11.2%.
Precious metals have been on a stellar rally over the past 12 months, amid broader market volatility, the decline of the U.S. dollar, bubbling geopolitical tensions and concerns about the independence of the Federal Reserve.
Katy Stoves, investment manager at British wealth management firm Mattioli Woods, told CNBC on Friday morning that the moves were likely “a market-wide reassessment of concentration risk.”
“Just as tech stocks — particularly AI-related names — have dominated market attention and capital flows, gold has similarly seen intense positioning and crowding,” she said. “When everyone is leaning the same way, even good assets can sell off as positions get unwound. The parallel isn’t accidental: both represent areas where capital has flooded in based on powerful narratives, and concentrated positions eventually face their day of reckoning.”
Meanwhile, Toni Meadows, head of investment at BRI Wealth Management, argued that gold’s run to the $5,000 mark had happened “too easily.” He noted that the unwinding of the greenback had supported gold prices, but that the dollar had appeared to stabilize.
“Central bank buying has driven the longer-term rally but this has tailed off in recent months,” he said. “The case for further reserve diversification is still there though as Trump’s trade policies and intervention in foreign affairs will make a lot of countries nervous about holding U.S. assets, especially those countries in the emerging markets or aligned to China or Russia. Silver will mirror the direction of gold, so it is not surprising to see falls there.”
