Gold and silver prices drop as investors feel reassured by Trump’s choice for the Fed.

January 30, 2026

Market Reactions to Federal Reserve Leadership Change

Gold and silver prices dropped on Friday, while European stock markets showed gains for the week. In contrast, Wall Street experienced a downturn as investors reacted to U.S. President Donald Trump’s announcement regarding the new Federal Reserve chair.

The decline in precious metals, typically viewed as safe investments, began following reports that Trump nominated Kevin Warsh, a former Fed official, to succeed Jerome Powell as chair of the central bank.

Trump shared his nomination on social media, praising Warsh, a past Morgan Stanley investment banker and Fed board member, as potentially “the best Fed chair.” This sparked a mix of hope and uncertainty among market analysts.

“It’s an interesting choice… that may give the market hope that the Fed’s independence will be maintained,” noted Kathleen Brooks, research director at XTB Trading Group. Yet, concerns linger regarding Trump’s previous criticisms of Powell, who plans to retire in May, leading to fears about the central bank’s policy independence and potential inflation risks for the economy.

The Week in Review

The volatility in precious metal prices was notable, especially after recent surges as investors sought safe havens amid doubts about the president’s policies. Gold, after reaching nearly $5,600 an ounce on Thursday, tumbled by up to 12% to dip below $5,000. Silver, which had also peaked at over $120 an ounce, fell about 30% to around $82.

This week has been turbulent for financial markets, affected by a weak dollar, warnings from Trump regarding Iran, threats of renewed tariffs, and speculations of a possible government shutdown.

Asian stock markets closed the week down sharply, following worries about substantial investments in artificial intelligence, which caused a technology-driven sell-off on Wall Street. While strong earnings from firms like Meta, Samsung, and SK Hynix initially buoyed the mood, Microsoft’s concerns about its costly AI initiatives weighed heavily on market sentiment.

There are apprehensions that current corporate valuations may be inflated, especially given the tech sector’s recent performance which has pushed stocks to record highs. Following Warsh’s appointment, the dollar has strengthened somewhat.

“Most currency strategists suggest his appointment could be favorable for the dollar, allowing us to factor in risks associated with a more cautious approach,” mentioned Fawad Razaqzada from Forex.com. However, uncertainties surrounding Trump’s tariff policies may hinder any significant recovery for the dollar.

Company Highlights

In company news, Verizon announced substantial growth in mobility and broadband subscriptions, achieving its best quarter since 2019 with an increase of 11.8%.