In a historic sell-off, silver prices plummeted on Friday, posting their steepest single-day decline in over four decades, while gold also tumbled sharply. The dramatic plunge was triggered by President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair, a move that eased market fears about the central bank’s independence and sent the U.S. dollar soaring.
Spot silver prices crashed by approximately 28% to $83.45 an ounce, while silver futures collapsed by 31.4% to settle at $78.53, marking the metal’s worst trading day since March 1980. Gold followed suit, with spot prices shedding around 9% to $4,895.22 an ounce.
The initial sell-off accelerated throughout the afternoon as traders who had heavily bought into the metals’ record-breaking rallies rushed to lock in profits. The surge in the U.S. dollar index, which rose about 0.8%, applied further pressure by making dollar-priced bullion more expensive for foreign investors and undermining narratives positioning metals as an alternative global reserve currency.
“This is getting crazy,” said Matt Maley, equity strategist at Miller Tabak. “Most of this is probably ‘forced selling.’… With the huge decline today, the margin calls went out.”
The nomination of Warsh, viewed by markets as a more traditional, independent candidate compared to other contenders, prompted a rapid reassessment. Analysts noted the metals market had been pricing in the risk of a more dovish Fed pick, which had previously supported prices.
“The Warsh pick should help stabilize the dollar some and reduce… the asymmetric risk of deep extended dollar weakness by challenging debasement trades – which is also why gold and silver are sharply lower,” said Krishna Guha of Evercore ISI.
The wipeout rippled through related assets. Mining stocks like Coeur Mining dropped 17%, while silver ETFs were hammered; the iShares Silver Trust fell 31% and the leveraged ProShares Ultra Silver fund collapsed over 62%.
The sell-off represents a stark reversal for the metals, which had been on a stellar rally for the past year. Gold had soared 66% in 2025 and silver 135%, driven by a “perfect storm” of dollar weakness, geopolitical tensions, and concerns over Fed policy.
Some analysts framed the plunge as a necessary correction after extreme crowding. “When everyone is leaning the same way, even good assets can sell off as positions get unwound,” noted one strategist, drawing parallels to concentrated rallies in tech stocks.
Despite the severe pullback, underlying supportive factors remain. Geopolitical tensions persist, including U.S. military posturing in the Middle East, tariff threats, and the unresolved Russia-Ukraine conflict. Furthermore, longer-term motives for central bank diversification away from U.S. assets, driven by Trump’s trade and foreign policies, could continue to underpin demand.
“The case for further reserve diversification is still there,” said Toni Meadows of BRI Wealth Management, acknowledging that while the rally may have peaked too easily, the fundamental drivers for gold and silver have not fully disappeared.
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