Gold and silver prices fell sharply on Friday, January 30, as global markets reacted to US President Donald Trump’s decision to nominate Kevin Warsh as the next chair of the Federal Reserve.
The sell off in precious metals gathered pace after reports, later confirmed by Trump, that the former Federal Reserve official had been chosen to replace Jerome Powell, whose term ends in May. Trump announced the nomination on his Truth Social platform, praising Warsh as a dependable leader and describing him as “one of the GREAT Fed Chairmen, maybe the best.”
Precious Metals Retreat From Record Highs
Safe haven assets, which had surged earlier in the week amid uncertainty over US economic policy, reversed sharply following the announcement.
Gold dropped more than eight per cent, falling below $5,000 an ounce after reaching a record high of $5,595.47 on Thursday. Silver suffered even steeper losses, plunging around 20 per cent to trade near $90 an ounce, a day after hitting an all time peak above $120.
Kathleen Brooks, research director at XTB, said the choice of Warsh was an “interesting pick” that may reassure markets about the independence of the Federal Reserve.
Trump’s repeated public criticism of Powell had previously unsettled investors, raising fears that political pressure on the central bank could weaken its autonomy, a scenario often associated with higher inflation risks.
Mixed Performance Across Global Markets
While precious metals sold off, European stock markets ended the week higher. Wall Street, however, closed slightly lower after a volatile trading session.
Financial markets have experienced sharp swings throughout the week, driven by a weaker US dollar, renewed tariff threats from Trump, rising tensions between Washington and Tehran, and concerns about a potential US government shutdown.
Asian markets also closed lower, tracking a technology led sell off on Wall Street.
Tech Earnings and AI Spending Stir Investor Caution
Earlier in the week, strong earnings from companies such as Meta, Samsung and SK Hynix helped lift market sentiment. However, confidence weakened after Microsoft announced a significant increase in spending on artificial intelligence infrastructure.
The move revived investor concerns that returns on heavy AI investment may take longer to materialise, especially after years of tech driven market gains that have pushed valuations higher.
Oil Prices Rise on Iran Tensions
Oil prices rebounded from early losses on Friday after surging the previous day, as Trump intensified rhetoric toward Iran.
Megan Fisher, assistant economist at Capital Economics, said escalating tensions between the US and Iran had pushed Brent crude to a six month high. However, she noted that historical precedent, including last year’s brief Iran Israel conflict involving the US, and ample global oil supply could cap prices by the end of 2026.
