Gold and silver prices plummeted early Friday morning following news that President Trump planned to nominate Kevin Warsh as the next chair of the Federal Reserve.
Investors started selling off precious metals with gold falling by as much as 10%, dropping from $5,500 an ounce to around $5,136 per ounce.
Meanwhile, silver nosedived by up to 20%, declining from $120 per ounce to around $103 per ounce.
Starting last year, gold and silver surged to one record high after another, fueled by investor demand for hard assets amid concerns over inflation, rising government debt and political pressure on the Fed.
Precious metals have been a safe have for investors concerned that the next Fed chair would cede to Trump’s demands to cut interest rates sharply.
News of the Warsh pick appeared to mollify those concerns.
He has a hawkish track record from his time as a Fed governor from 2006 through 2011 and is considered likely to maintain the Fed’s independence.
“Warsh came up in investment banking at Morgan Stanley, served as one of the youngest Fed governors in history, and was seriously in the room during the great financial crisis,” Dean Lyulkin, founder of The Dean’s List newsletter, told The Post.
“That pedigree is rare. It tends to produce clear signals, few surprises, and a pragmatic approach to the delicate balance between inflation and growth.”
“Businesses and investors should breathe easier.”
Since gold and silver are non-yielding, hard assets often used as hedges against inflation and currency debasement, higher interest rates tend to favor yield-producing assets such as bonds and cash, reducing the appeal of precious metals.
Federal prosecutors opened a criminal investigation into Powell earlier this month over his June 2025 congressional testimony about a $2.5 billion renovation of the Fed’s headquarters, issuing grand jury subpoenas tied to whether his statements were misleading.
Powell disclosed the probe in an extraordinary public statement, portraying it as retaliation for the central bank’s refusal to bow to White House pressure to cut interest rates. He warned that using law enforcement against the Fed threatened its ability to set policy based on economic data rather than politics.
The investigation sparked immediate backlash across Wall Street and global financial institutions, with central bankers and executives warning it could undermine confidence in the US financial system.
Several Republican lawmakers, including Sen. Thom Tillis of North Carolina, said they would block future Fed nominations until the matter is resolved. Tillis has vowed to vote against any new nominees in the interim.
On Friday, he called Warsh “a qualified nominee with a deep understanding of monetary policy” but reiterated his stance on nominees.
“My position has not changed: I will oppose the confirmation of any Federal Reserve nominee, including for the position of Chairman, until the DOJ’s inquiry into Chairman Powell is fully and transparently resolved,” Tillis wrote on X.
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