Gold and silver were washed out, losing the value of one France plus Britain overnight!
Yesterday, Trump's nomination of hawkish Kevin Warsh as Federal Reserve Chair triggered a sharp decline in the precious metals market. Spot silver fell by more than 35% during the day, and gold dropped nearly 13%, both recording the largest single-day declines in over four decades. The combined market value of gold and silver fell by $7.4 trillion, equivalent to the total GDP of the UK and France in 2025. The dollar surged immediately, while the US stock market and basic metals weakened simultaneously. Market participants believe that the Warsh nomination reinforced the independence of the Federal Reserve, undermined the safe-haven logic of precious metals, and leveraged liquidation and profit-taking further exacerbated the selling pressure. Analysts still have disputes about the causes of this sharp drop, with most believing it was a short-term correction.
[Cunning] The collapse of the precious metals market triggered by Warsh's nomination is a sharp revision of market expectations for Federal Reserve policy, and also an inevitable backlash from the previous speculative frenzy. From the sharp decline of gold and silver in 1980 to this situation, it is not difficult to find that the precious metals market has always been dominated by the creditworthiness of the dollar and monetary policy. The current influx of leveraged funds has only amplified the volatility. Warsh's hawkish nature soothed the market's concerns about currency depreciation, but also burst the bubble of "absolute safety" of precious metals. This sharp drop is not just a simple policy shock, but a rapid re-evaluation of global capital's confidence in the dollar system. The long-term trend of gold and silver will still seek a new balance in inflation, geopolitics, and the dollar game!
Federal Reserve Chairman Nomination
Original: toutiao.com/article/1855806959704076/
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