Gold and silver prices tumbled sharply on Friday after US President Donald Trump appointed Kevin Warsh as the next Chair of the Federal Reserve.
The appointment helped ease market concerns over the independence of the US central bank and triggered a significant strengthening of the US dollar.
As reported by cnbc.com, spot silver prices slumped by around 28 per cent to US$83.45 per ounce, hovering near the session low.
Meanwhile, silver futures plunged 31.4 per cent to close at US$78.53 per ounce, marking the steepest single-day decline since March 1980.
Gold was not spared from the sell-off. Spot gold prices fell by about 9 per cent to US$4,895.22 per ounce. Gold futures dropped even more sharply, down 11.4 per cent, settling at US$4,745.10 per ounce.
The heavy selling was initially triggered by reports of Warsh’s appointment and later intensified as investors rushed to lock in profits following a prolonged rally in precious metals.
A stronger US dollar further pressured gold and silver prices, as it makes precious metals more expensive for non-US buyers.
This development also undermined the narrative that gold and silver could replace the US dollar as the world’s global reserve currency. The US dollar index was last seen rising by around 0.8 per cent.
“The situation is truly extreme,” said Matt Maley, Equity Strategist at Miller Tabak.
He noted that the sharp decline was largely driven by forced selling.
According to Maley, silver had recently become a favoured asset among short-term traders, leading to increased leverage and triggering margin calls when prices collapsed.
Previously, National Economic Council Director Kevin Hassett had been widely viewed as a strong candidate to succeed Jerome Powell.
However, in recent days, Kevin Warsh emerged as the frontrunner in prediction markets. Evercore ISI said markets reacted to Warsh’s nomination on the assumption of a tighter monetary policy stance.
Evercore ISI Vice Chairman Krishna Guha said Warsh’s appointment as Fed Chair could help stabilise the dollar and reduce the risk of a sharp depreciation in the US currency.
Nevertheless, he cautioned markets against overreacting, noting that Warsh is considered more pragmatic rather than an ideological “hawk”.
Despite the sharp sell-off, gold and silver had previously recorded extraordinary gains throughout 2025, surging 66 per cent and 135 per cent, respectively.
However, analysts said crowded positions and excessive concentration of investments left the market vulnerable to sharp corrections when sentiment shifts.
