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Gold and silver surged for much of the past year. President Trump’s Fed pick stopped them cold.
Investors had been betting on a dovish Fed chair. Trump picked a hawk instead, and the gold and silver market reacted fast.
ByBrandon Kochkodin,Forbes Staff. Brandon is a Florida-based Forbes senior reporter covering markets.
Jan 30, 2026, 01:30pm EST
President Donald Trump said Friday that he plans to nominate former Federal Reserve governor Kevin Warsh as the next chairman of the central bank.
Warsh served on the Federal Reserve’s Board of Governors during the Great Financial Crisis, when the Fed first rolled out unconventional policies like quantitative easing, or QE. He pushed back (though he ultimately went along with it). He warned the bond-buying programs would fuel inflation (it didn’t) and distort markets (check). That stance earned him a reputation as a monetary hawk. It also makes his nomination an unexpected move from a president who has been openly pressuring the Fed, targeting its leaders and backing an investigation into current chair Jerome Powell that could become criminal.
Trump’s announcement rippled straight into the metals market. By midday, gold and silver were having their worst day since Ronald Reagan was president. By 11:30 a.m. Eastern time, gold was down 7%, in what would be its worst session since April 2013. Silver was down 19%, which if it holds, would be its biggest single day drop since 1987. Together, that adds up to a 26% combined drop in a single session.
That kind of move almost never happens. The last time gold and silver suffered a bigger one-day combined loss was April 1987. Gold fell 5%. Silver dropped 23%. The combined decline was 28%. Before that, the only worse day going back to the 1960s came on Jan. 22, 1980, when gold plunged 13% and silver slid 15%.
Put some of the blame on Warsh’s reputation
Precious metals usually struggle when investors expect higher interest rates and a stronger dollar. They tend to do better when money looks cheap and the dollar looks weak. For months, traders had been betting that Trump would pick a Fed chair who would push for lower rates. Warsh arrived with the opposite image.
But you can also point a finger at the metals themselves.
Gold is up about 75% over the past year. Silver is up more than 180%. Screaming markets like that don’t need much of a scare to go into hiding. If Warsh takes the job and sticks to his old views, this selloff could mark a turning point. More likely though, it was a crowded trade looking for an excuse to take a breather. On Friday morning, Kevin Warsh’s past was excuse enough.
Original:https://www.forbes.com/sites/brandonkochkodin/2026/01/30/trumps-fed-pick-warsh-sets-off-the-worst-day-for-gold-and-silver-since-the-1980s/
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