A Political Shockwave Triggers Historic Silver Sell-Off

Silber Preis XC0009653103

Friday witnessed one of the most severe single-day collapses in the history of the silver market. The plunge was triggered not by an economic crisis, but by a political announcement: former President Donald Trump's nomination of Kevin Warsh to lead the Federal Reserve. This single event sent shockwaves through the entire precious metals complex.

The sell-off was broad and brutal. Silver, which had hit a record high near $122 per ounce just the day before, plummeted. It found a daily low between $74 and $76, closing with a loss exceeding 26%. The contagion spread rapidly. Gold prices fell more than 8%, while platinum and palladium each shed up to 19% of their value. Even the industrial metal copper declined over 4%, as geopolitical tensions that had previously supported prices were suddenly overshadowed.

The Deeper Market Fear

The violence of the move was notable. Typically, silver benefits from the prospect of lower interest rates—a policy Warsh has recently advocated. However, market participants looked beyond this surface-level view. Warsh is perceived as a former monetary policy hawk who has adjusted his stance to align with Trump's preferences. The core investor concern centers on the potential erosion of the Federal Reserve's independence. A Fed seen as bowing to political influence introduces profound unpredictability. For markets that had bet heavily on rising commodity prices for months, such uncertainty became intolerable. Aggressive profit-taking in an already overbought market exacerbated the downward spiral.

A Market Ripe for a Correction

The hunt for liquidity engulfed the entire commodity sector. Following an extraordinary gain of over 150% in 2025 and further strong advances at the start of the year, conditions were ripe for a sharp correction. The Warsh nomination provided the catalyst. The event highlights how fragile markets can become after an extended rally. The question of monetary policy stability in the United States is likely to weigh on commodity markets for some time, particularly for those assets whose value is closely tied to low interest rates and confidence in the nation's central bank.