Gold and Silver Extend Historic Sell-Off After Trump Names Kevin Warsh as Fed Chair Pick
Gold and silver extended their steep sell-off on Monday, deepening losses triggered late last week after U.S. President Donald Trump named a new candidate to lead the Federal Reserve.
Both precious metals had been trading at record highs on Thursday before plunging after Trump announced on Friday that he wants Kevin Warsh to replace Jay Powell as chair of the Federal Reserve from May. Markets interpreted the nomination as reducing the risk of aggressive interest-rate cuts and political interference in monetary policy.
Gold and silver, traditionally seen as safe-haven assets, suffered their worst single-day falls since 1983 and 1980 respectively by the US close on Friday. The sell-off continued into Monday, with spot gold down a further 7% to $4,480 per ounce, while silver slid nearly 11% to $73.94, following a 30% collapse in the previous session. Both metals had surged to record highs of $5,594.82 for gold and $121.64 for silver during the rally.
Analysts said the move was amplified by brokerages raising margin requirements, forcing some investors to liquidate positions to meet higher collateral demands.
The turmoil spread across other asset classes. Bitcoin fell below $80,000 for the first time since April and was trading near $75,000, while Brent crude slipped to $65 a barrel. Asian markets closed sharply lower, with Hong Kong’s Hang Seng Index down 2.3%. In Europe, the FTSE 100 fell 0.5%, and US futures pointed to a roughly 1% drop for the S&P 500.
Ipek Ozkardeskaya, senior analyst at Swissquote, said Warsh’s past criticism of Federal Reserve policy suggests a stronger focus on shrinking the central bank’s balance sheet, a shift that could mark «the end of the era of free money for markets.»
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