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Trump Nomination of Kevin Warsh Sends Gold and Silver Prices Plunging

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Gold and silver bars with stock market graph overlay showing a decline

Market Shock After Trump’s Fed Pick

Markets reacted sharply after President Donald Trump announced Kevin Warsh as his choice to lead the Federal Reserve. The announcement sent gold and silver prices tumbling, wiping out billions in market value almost overnight.

Contents
Market Shock After Trump’s Fed PickImpact on Gold, Silver, and the DollarInvestor Reactions and Long-Term Outlook

Warsh is widely seen as a free-market, inflation-focused economist. Influenced by Milton Friedman, he has argued that inflation mainly results from excessive money printing. This approach differs from the current Fed’s policy, which has focused on keeping borrowing costs low.

Impact on Gold, Silver, and the Dollar

Investors immediately interpreted Warsh’s nomination as a signal of tighter monetary policy ahead. Tighter policy usually means higher interest rates, which strengthen the U.S. dollar. As a result, gold and silver lost their appeal as safe-haven investments, sparking a rapid selloff.

Before the announcement, both metals had enjoyed a strong rally. Gold and silver had reached new highs amid inflation concerns, trade tensions, and doubts about the dollar’s stability under Trump’s policies. However, Warsh’s nomination triggered gold’s worst one-day drop since 2013 and silver’s steepest single-day loss since 1980.

Investor Reactions and Long-Term Outlook

The sudden drop unsettled investors, especially retirees who rely on precious metals as a hedge against inflation. Analysts warn that volatility may continue as markets await further policy signals from Washington and potential changes at the Federal Reserve.

Despite the short-term plunge, long-term demand for gold remains supported by steady foreign central bank purchases. Countries like China continue to diversify their reserves away from the U.S. dollar amid ongoing geopolitical tensions, which provides a stabilizing factor for the metals market.

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