Silver, gold fall as U.S. dollar rebounds on next Fed chair

Precious metals prices plunged on Friday as a rebound in the U.S. dollar led some investors to book profits on the metals.

Silver plunged 22% to trade at $90.73 an oz. Friday afternoon while spot gold dropped 8.3% to $4,931.48 an oz., Trading Economics data show. Both metals hit record highs earlier this week, with gold peaking at nearly $5,600 and silver topping $121.

United States President Donald Trump on Friday nominated Kevin Warsh to head the Federal Reserve when current chairman Jerome Powell’s four-year term ends in May. Warsh, a visiting fellow in economics at Stanford University’s Hoover Institution, is widely seen as capable of preserving the Fed’s independence and shielding it from calls to make deep cuts in interest rates, analysts said.

Friday’s drop in precious metals prices is due “to the move higher in the dollar and after an extraordinary surge, both last year and in the first weeks of 2026,” Dan Coatsworth, head of markets at U.K.-based investment platform AJ Bell, said in e-mailed comments.

The dollar’s rebound reflects “the thinking that Warsh won’t be a marionette for the Trump administration. It implies the chances of aggressive rate cuts in 2026 regardless of the backdrop, something which Trump has not been shy in calling for, are slimmer,” he added.

Investor appetite

Silver hit a record $121.64 on Thursday, Trading Economics data show. It remains on track for a gain of more than 40% in January, its ninth consecutive monthly advance.

The white metal closed 2025 at $71.66, a 148% gain that outpaced gold’s 65% increase. 

A weak U.S. dollar, heightened geopolitical tensions – amid U.S. efforts to take over Greenland – and sustained industrial and investment demand for the metal have all fed investor appetite for silver, analysts say.

“When we see a straight up move, it’s hard not to expect a correction,” Maria Smirnova, chief investment officer at Sprott Asset Management, said Friday in an interview. “Both silver and gold have done exceptionally well, particularly silver, which has completely outperformed gold as of late. The U.S. dollar has been selling off, which contributed to the rally. President Trump wants lower rates and a lower dollar, and that is partly what has fueled the rally.

“We view gold and silver as tools to protect your wealth to protect against fiat currency debasement. And in the last few decades, we’ve seen exactly that.”