Silver’s Historic Plunge: A “Black Friday” for Precious Metals

Silber Preis XC0009653103

Friday's trading session delivered a shock to global commodity markets, with silver leading a historic sell-off across the precious metals complex. A surprise personnel announcement from Washington triggered a wave of panic selling, fundamentally altering expectations for U.S. monetary policy and sending prices into a tailspin.

• Price Collapse: Silver plummeted by 26.47 percent, closing the session at $85.14 per ounce.
• Key Catalyst: The nomination of noted monetary policy "hawk" Kevin Warsh to chair the Federal Reserve.
• Extreme Volatility: Prices crashed from record highs above $121 to an intraday low near $74.

The abrupt shift in sentiment was directly tied to President Donald Trump's selection of Kevin Warsh to lead the Federal Reserve. Known in financial circles as a critic of overly accommodative policy, Warsh's appointment sparked immediate anticipation of a more restrictive central bank course.

This prospect triggered a sharp rally in the U.S. dollar. As global commodities are priced in dollars, the stronger currency made assets like silver significantly more expensive for holders of other currencies, prompting a massive liquidation wave. The selling pressure was compounded by fresh inflation data showing U.S. producer prices rose 0.5% in December, exceeding forecasts and further stoking interest rate concerns.

Unprecedented Daily Volatility

The scale of the decline was staggering, marking one of the most severe single-day losses for the metal since the early 1980s. After touching record levels above $121 earlier in the week, silver found no support, plunging to a daily low around $74 before a minor recovery settled prices at the $85.14 close. The metal now sits roughly 27 percent below its 52-week high, underscoring the severity of the correction.

The contagion spread to other precious metals. Gold was also dragged sharply lower, falling from levels above $5,600 to breach the $5,000 threshold. Market analysts described the session as a true "Black Friday" for investors in the sector.

Profit-Taking or a Lasting Reversal?

Despite the brutal sell-off, many experts caution against declaring the long-term bull market over. A significant number of market observers view the plunge primarily as a long-overdue correction following a parabolic, unsustainable price rally. Fundamental supports for the market remain, including persistent geopolitical risks. Ongoing tensions in the Middle East, particularly recent U.S. warnings to Iran, continue to underpin the traditional "safe-haven" status of precious metals.

All eyes are now on the Asian trading session opening Monday morning. The market will be watching closely to see if further margin calls exert additional downward pressure or if a base can form around the $85 level. With annualized volatility nearing 96 percent, investors should brace for continued dramatic price swings in the days ahead.