Gold and Silver Crash After Fed Chair Choice Calms Independence Fears

CNBC, Business Insider, the Financial Times, Bloomberg, CNN, and BBC contributed to this report.

Gold and silver woke up on Friday with a serious hangover.

President Trump’s surprise pick of Kevin Warsh to run the Federal Reserve sent a relief rush through markets that promptly punched a hole in the “debasing dollar → buy gold” trade. Silver plunged (briefly) into double-digit territory – down as much as 16% in early trading – before settling around a 10.6% loss to roughly $103.81 an ounce by 7:12 a.m. ET. Gold wasn’t spared: spot gold fell as much as 7% at one point and was off about 5.7%, trading near $5,136 an ounce.

Futures followed the panic – front-month gold contracts slid about 3.4% in New York and February silver futures tumbled roughly 10%. The rout rippled across the precious-metals complex: platinum fell more than 10% and palladium dropped close to 8%.

Why the sell-off? Simple: Warsh is seen as someone who will preserve Fed independence and tamp down the idea that the central bank will be radically loosened to suit presidential wishes. That undercut the “debasement” narrative that fueled last year’s blistering metals rally – and a stronger dollar helped finish the job. Evercore ISI’s Krishna Guha summed it up neatly, saying markets were “trading Warsh hawkish,” which helped stabilize the dollar and erode some of the upside pressure on gold and silver.

Traders and strategists were quick to label the move a mix of profit-taking and a forced unwind of crowded positions. “When everyone is leaning the same way, even good assets can sell off as positions get unwound,” Katy Stoves, an investment manager at Mattioli Woods, noted – a neat description of how quickly a crowded trade can reverse.

The context matters: gold and silver have been on a tear. In 2025 gold jumped roughly 65% and silver exploded about 150%, making both hot, crowded plays for investors seeking a hedge against geopolitics, tariffs and a soft dollar. That fervor drew in retail sellers, pawn shops and ETF flows – which only magnified the move when sentiment flipped.

The fallout showed up everywhere. Major silver miners and ETFs were smacked in premarket trade: the ProShares Ultra Silver fund plunged over 20% before the bell, the iShares Silver Trust lost double digits, and silver miners like Endeavour Silver and Coeur Mining slid sharply. Europe’s Stoxx 600 Basic Resources index – packed with mining names – was down, too.

Analysts warned not to read too much into a single day. Evercore’s Guha cautioned that while the Warsh news removes some asymmetric downside risk for the dollar – and therefore for precious metals – the market could still whipsaw. Others called Friday a “knee-jerk” reaction after a parabolic run in metals that almost begged for a pullback.

Bottom line: Friday’s move didn’t erase last year’s gains – it just paused them. Metals traders will now watch how Warsh’s nomination plays out politically and whether the Fed stays its current course. Until then, the gold and silver party looks like it’s cooling off – fast.