Price Slides for Gold and Silver as Fed Chair Nomination Shifts Market Sentiment
On July 13, 2022, Robin Kolbenbach, CEO of Algol Heraeus, showed one kilogram of silver and gold bars at the company’s factory in Mendrisio, Switzerland. Fast forward to today, and it appears that gold and silver prices have taken a tumble once more.
Reports indicate that gold and silver prices fell recently as Donald Trump’s selection of Kevin Warsh as the new Federal Reserve Chair seemed to alleviate concerns regarding the independence of the central bank. Spot silver, for instance, dropped 10.6% to about $103.81 an ounce, recovering slightly from an early 16% drop that took it below the critical $100 mark.
Spot gold prices, on their part, saw a decrease of around 5.7%, settling at $5,136.27 per ounce, having previously been down as much as 7%. It’s interesting how these fluctuations can sweep through the market so quickly.
Moreover, the futures market reflected this downturn, with gold contracts in New York sliding 3.4% and February silver futures falling 10%. This trend extended itself to the entire precious metals market; spot platinum declined by over 10%, while palladium fell nearly 8%.
The backdrop to these movements includes Trump’s recent nomination of Warsh, who served during the 2008 financial crisis, to take over from current Fed Chairman Jerome Powell. Kevin Hassett, from the National Economic Council, was frequently pointed to as the leading candidate to replace Powell, but recently, Warsh seems to have taken the lead in predictions.
Krishna Guha from Evercore ISI mentioned in a morning note that the market was now in what could be described as “warsh hawkish trading.” He went on to suggest that Warsh’s appointment should stabilize the dollar, thus reducing the risks of significant depreciation, which could explain why gold and silver prices have been plunging sharply.
While he expressed his hope that Warsh wouldn’t become too aggressive in his trading approaches, noting the potential for unpredictable outcomes, he views him as more of a pragmatist—rather than a strict ideological hawk.
On another note, Claudio Wewell, a currency strategist at J. Safra Sarasin Sustainable Asset Management, reflected on the “perfect storm” of geopolitical issues that have fueled precious metals so far this year. This includes the detention of Venezuelan President Nicolas Maduro and U.S. military threats toward countries like Greenland and Iran. Wewell pointed out that speculation about the next Fed chair has significantly influenced metal markets lately.
Impacts of the Metal Market Decline
Both gold and silver reached record highs in 2025, surging by 65% and 150% respectively. Those gains mostly persisted into 2026, with silver up 45% and gold 19% for the year so far. Nevertheless, Friday saw global stock exchanges reacting to the decline in metal prices, with Europe’s Stoxx 600 Basic Resources Index falling by 2% by afternoon trading.
In London, major silver producer Fresnillo took a hit, dropping 4%. On Wall Street, in premarket trading, Endeavor Silver lost 9%, while Cool Mining saw an 8% dip. Silver ETFs were not spared either; the ProShares Ultra Silver Fund fell more than 22% before the market opened, and the iShares Silver Trust dropped 11.2%.
Over the past year, precious metals have experienced a robust rally amid market volatility, a weakening dollar, growing geopolitical tensions, and concerns surrounding the Federal Reserve’s independence. Katie Stoves from Mattioli Woods noted the current market movements likely signal a reassessment of concentration risks. She remarked that just as tech stocks are receiving a lot of investor excitement, gold is similarly seeing intense activity, hinting that even solid assets might face liquidation if everyone’s leaning the same way.
In contrast, Toni Meadows from BRI Wealth Management mentioned that gold’s rise to the $5,000 level occurred somewhat easily. While the dollar’s decline has boosted gold prices, he feels the dollar is showing signs of stabilization. He acknowledged that central bank purchases have been pivotal for long-term price increases, but those trends seem to be slowing down.
In summary, there are still opportunities for diversification in foreign reserves. President Trump’s trade approaches are making many countries wary of U.S. assets, especially among emerging markets closely tied to China and Russia. Thus, a dip in silver prices, mirroring gold trends, is hardly unexpected.
