Gold and Silver Prices Plunge from Record Highs—What Investors Need to Know

Gold and silver prices tumbled on Friday as investors locked in profits after President Trump nominated Kevin Warsh to chair the Federal Reserve, allaying some of Wall Street’s fears about the president’s efforts to exert greater control over the independent central bank. 

Spot gold fell 9% to $4,905 per troy ounce after hitting a record high of about $5,600 on Thursday. Silver prices, which touched an all-time high above $120 yesterday, dropped 26% to $86.60 an ounce. Exchange traded funds tracking the precious metals, including the iShares Silver Trust (SLV) and SPDR Gold Shares (GLD), were suffering similar declines.

Gold and silver prices have soared over the past year, driven by geopolitical and economic uncertainty, as well as a weaker U.S. dollar. Heading into Friday’s session, gold prices were up nearly 90% in the preceding 12 months. Silver climbed about 250% in the same period.

Investors breathed a sigh of relief on Friday when President Trump announced Kevin Warsh, a former Fed Governor, as his pick to replace current chair Jerome Powell, whose term is up in May. Warsh was one of the more establishment-friendly candidates being considered by Trump, who has spent the past year pressuring the Fed to aggressively lower interest rates despite elevated inflation and tariff uncertainty. Warsh’s nomination reassured investors concerned that a Trump loyalist leading the Fed would compromise the central bank’s independence, undermining the legitimacy of U.S. monetary policy.

Trump's announcement sparked a dollar rally that added pressure to precious metals. The U.S. dollar index, which touched a 4-year low earlier this week, rose 0.9% on Friday. The dollar’s weakness since Trump returned to office—the USD index is down more than 10% in the past year—has boosted foreign demand for metals priced in dollars, helping to fuel their rally.

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The reaction in precious metals markets was especially dramatic. Palladium prices doubled in the year leading up to Friday, and slid about 14%. Platinum slumped 18% after nearly tripling in value over the last year.

Jeff deGraaf, chairman and head of technical research at Renaissance Macro Research, said of the precious metals reaction: "Parabolic moves have hair triggers, and those hair triggers can go off at any point in time, and that's why they're so dangerous and so susceptible to these mass changes in psychology. They really have nothing to do with the fundamentals."

Update—Jan. 30, 2026: This article has been updated with the latest market prices and commentary from Renaissance Macro.