US stocks declined following President Trump’s nomination of Kevin Warsh to head the Federal Reserve. The US dollar strengthened, while gold and silver prices plummeted, interrupting a significant rally in precious metals. The S&P 500 (^GSPC) decreased by 0.4%, while the tech-focused Nasdaq Composite (^IXIC) declined by 0.3%. The Dow Jones Industrial Average (^DJI) also experienced a drop of 0.3%.
All three major indices concluded the month in positive territory. The most notable movement occurred within the precious metals sector, where spot gold fell below $5,000, marking its largest decline since the early 1980s at one point. Silver also declined by over 25%. Read below to learn more about the Silver Crashes After Trump Pushes Warsh For Fed Chair.
Silver Crashes After Trump Pushes Warsh For Fed Chair
Gold and silver experienced a significant decline on Friday as the markets responded to the announcement that President Donald Trump had chosen Kevin Warsh to succeed Jerome Powell as the head of the Federal Reserve. GC00 -8.33% faced their most severe one-day drop on record, closing at $4,745, which is a decrease of 11%.
The most-active silver futures SI00 -25.50% ended down 31% at $78.53, marking their largest single-day decline since a nearly 32% drop in March 1980. Earlier this week, both metals reached unprecedented highs of $5,626.80 and $121.785, respectively, concluding a month of substantial gains. The selling pressure initiated on Thursday but escalated on Friday.
Gold prices dipped below $5,000 earlier in the day, before Trump’s announcement on Truth Social endorsing the former Fed governor. Powell’s term as chair is set to expire on May 15, but the U.S. Senate is required to vote to confirm his successor. “I have known Kevin for a long time, and I am confident that he will be remembered as one of the GREAT Fed Chairmen, possibly the best,” Trump stated in a post on the social media platform.
Silver’s Jump in 2026
Silver’s rise in 2026 has attracted the attention of international analysts and leading financial institutions. On January 29, silver reached unmatched levels of approximately $120 per ounce, marking an increase of over 65% in January alone, fueled by a mix of safe-haven investments, industrial usage, and speculative trading.
In this context, Citigroup’s commodities division has elevated its short-term projection for silver to $150 per ounce, a notable increase from previous estimates of $85 to $100. Citi analysts characterised silver’s performance as “gold on steroids,” propelled by ongoing capital inflows, geopolitical uncertainties, and technical factors such as a declining gold-to-silver ratio. They anticipate further growth unless silver becomes historically overpriced compared to gold.
Silver’s Role as a Safe Haven
While silver experiences significant fluctuations that attract media attention, leading banks and institutional strategists are concentrating on the path of gold in 2026. UBS has recently raised its gold price prediction to $6,200 per ounce for the initial three quarters of the year, attributing this to strong investment demand amidst geopolitical instability and possible changes in Federal Reserve policies, although it expects a slight decline to $5,900 by the end of the year.
Similarly, Deutsche Bank and Société Générale have estimated that gold could reach $6,000 per ounce in 2026, supported by a broad demand for non-dollar assets and the accumulation by central banks. These predictions come in the wake of gold’s remarkable performance, which includes a peak exceeding $5,100 per ounce fueled by safe-haven purchases and anticipations of forthcoming interest rate reductions.
