ASIATODAY.ID, WASHINGTON — Gold and silver prices suffered one of their worst single-day collapses in decades on Friday after US President Donald Trump named former Federal Reserve governor Kevin Warsh as his pick to lead the central bank, triggering a massive wave of profit-taking across global markets.
Gold prices plunged 12%, falling from a January 29 peak of around $5,600 per ounce to roughly $4,800, marking the metal’s steepest one-day decline in more than ten years. Despite the sharp selloff, gold remains up about 65% year-on-year.
Silver endured an even more dramatic rout. Prices collapsed by over 30%, dropping below $80 per ounce — the metal’s worst single-day fall since 1980.
In total, the plunge erased an estimated $7.4 trillion in market value from gold and silver in just 24 hours, an amount roughly equivalent to one quarter of the US economy.
Warsh Nomination Triggers Market Reversal
Precious metals had surged in recent months amid fears that the Federal Reserve could lose its independence and be pressured into holding interest rates artificially low to help finance expanding US government debt. That narrative abruptly shifted following Trump’s announcement.
While Warsh was previously known for his hawkish stance on interest rates, echoing outgoing Fed Chair Jerome Powell’s warnings against premature rate cuts, he has recently softened his tone, saying Trump was “right to be frustrated” by the slow pace of monetary easing.
According to analysts, Warsh’s nomination effectively stripped away the “inflation panic premium” that had fueled the rally in precious metals, as investors interpreted the move as a signal that the Fed would continue to prioritize price stability over political pressure.
Long-Awaited Correction
Market strategists also described the selloff as a long-overdue technical correction, following months of uninterrupted gains that left both gold and silver deeply overbought. Elevated prices offered traders an attractive exit, accelerating selling once sentiment turned.
Despite the violent pullback, analysts remain broadly constructive on safe-haven assets. They argue that the fundamental drivers behind the 2025 rally — geopolitical tensions, persistent inflation risks, trade frictions linked to Trump’s tariff policies, and the ballooning US debt burden — remain firmly in place.
Russia and Central Banks Stand to Benefit
The rally ahead of Friday’s crash delivered a major windfall for Russia, with the value of its gold holdings rising by more than $216 billion, nearly matching the $300 billion in sovereign assets frozen by Western governments.
Analysts at JPMorgan and Goldman Sachs suggest the current correction may provide a strategic buying opportunity for central banks, which could use lower prices to further expand bullion reserves. (AT Network)
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