Silver and Gold Prices Plummet

Silver and gold prices dropped sharply on Friday. The current market price of silver fell 28% to $83.45 per standard precious metal weight unit. Silver futures also plummeted 31.4% to $78.53, marking its worst day since March 1980.

The price of gold also decreased, shedding around 9% to trade at $4,895.22 per standard precious metal weight unit. Gold futures dropped 11.4% to settle at $4,745.10.

What Caused the Price Drop?

The sharp moves down were initially triggered by reports of Kevin Warsh's nomination for the next chair of the Federal Reserve. This news relieved concerns about the central bank's independence and sent the dollar soaring. As a result, metals became more expensive for foreign investors to buy, making their prices drop.

Impact on Investors

Investors who had invested in metals were forced to sell their assets to book profits, further driving down the prices. The dollar index was last traded around 0.8% higher, making it even more expensive for foreign investors to buy gold and silver.

Trump's Nomination

National Economic Council Director Kevin Hassett was initially the favorite to replace Powell, but Warsh became the front-runner in prediction markets in recent days. Evercore ISI's Krishna Guha said the market was "trading Warsh hawkish," meaning that Warsh's nomination would help stabilize the dollar and reduce the risk of deep extended dollar weakness.

Market Reactions

The market has clearly been pricing the risk of a much more dovish contender, which has been helping the gold price along with other precious metal prices. However, the news flow has changed, and the market is now reacting to the new information. Claudio Wewel, FX strategist at J. Safra Sarasin Sustainable Asset Management, said that a "perfect storm" of geopolitical tensions had helped precious metals move higher this year.

Record-Smashing Rallies

Gold and silver both enjoyed record-smashing rallies in 2025, surging 66% and 135%, respectively, over the course of the year. However, this rally has come to an end, and the prices are now dropping. Coeur Mining lost 17%, and silver ETFs were dragged into the action, with the Ultra Silver fund last seen more than 62% lower.

Future Outlook

The case for further reserve diversification is still there, especially with Trump's trade policies and intervention in foreign affairs making countries nervous about holding U.S. assets. Silver will likely mirror the direction of gold, so it is not surprising to see falls there. As the market continues to react to the new information, it is likely that the prices of gold and silver will continue to fluctuate.