Gold and silver tumbled on Friday, with stocks also retreating sharply as markets reacted to Donald Trump’s pick for Fed Chair.
Gold fell 12% while silver plunged more than 30%, as investors reassessed expectations for interest rates following Kevin Warsh’s nomination.
Warsh’s appointment strengthened the US dollar and weakened the so-called “debasement trade,” which has driven the year-long rally in precious metals.
After reaching multiple all-time highs over the past 12 months, gold and silver suffered a brutal reversal. Gold dropped to around $4,786 an ounce — its worst single-day loss in over a decade — while silver recorded its biggest fall since 1980.
Warsh, a former Fed Governor, is expected to replace Jerome Powell if confirmed by the Senate. His reputation as a more hawkish and independent central banker eased fears of aggressive rate cuts, triggering profit-taking across metals markets.
US stocks also pulled back, with the Nasdaq falling over 1% and the S&P 500 slipping further from recent record highs, as the dollar surged and investors adjusted their outlook for monetary policy.