Global precious metals markets suffered a dramatic sell-off after US President Donald Trump announced his nomination of Kevin Warsh as the next chair of the Federal Reserve, triggering what analysts described as one of the sharpest corrections in decades.
More than $US15 trillion was wiped off the combined value of gold and silver within 24 hours, an amount equivalent to roughly half of the US economy. The sell-off came after a prolonged speculative rally that had driven prices to historic highs.
Silver prices were hit hardest, plunging as much as 30 per cent to $US80.55 an ounce before recovering slightly during US trading. It marked the steepest one-day fall in silver since March 1980. Gold also fell sharply, dropping around 11 per cent to $US4,812 an ounce.
Market strategists said the collapse was driven largely by forced selling and margin calls, as leveraged traders scrambled to cover losses. Equity strategist Matt Maley described the move as “crazy”, noting that silver had become one of the most heavily traded speculative assets in recent weeks.
Despite the sell-off, analysts stressed that the longer-term fundamentals for gold and silver remain intact. Capital.com analyst Daniela Hathorn said the correction was “overdue” after gold gained nearly 20 per cent and silver more than 30 per cent in just 10 days.
Gold had surged to a record $US5,602 earlier in the week, having started 2025 at around $US2,600 an ounce, as investors sought protection from geopolitical risk and fiscal uncertainty.
The market reaction was compounded by a strengthening US dollar, which makes commodities more expensive for international buyers. Australia’s dollar slipped below 70 US cents overnight.
Bitcoin and other risk assets also came under pressure, as investors reassessed market valuations following Trump’s Fed announcement.
