Gold Plummets Near 10% After Trumps Fed Chair Nomination Sparks Hawkish Repricing
Source: Kapitales Research
Key Highlights
• Gold prices slid sharply—approximately 9–10%—following the announcement that President Donald Trump intends to nominate Kevin Warsh as Federal Reserve Chair.
• The US dollar strengthened on expectations of a more hawkish Fed stance, prompting profit-taking in precious metals.
• Silver and other metals also experienced significant declines, reflecting broader risk repricing across commodities markets.
Geopolitical and Policy Trigger
Gold, which had recently reached multi-year highs, experienced one of its steepest short-term declines in decades following reports that President Trump would nominate former Fed Governor Kevin Warsh to lead the Federal Reserve. Markets interpreted the nomination as a shift toward a more traditional central banking stance—potentially less inclined to aggressive rate cuts or unconventional stimulus—reducing safe-haven demand for gold and other precious metals.
Warsh’s extensive tenure at the Federal Reserve during the 2008 financial crisis shaped perceptions of his likely policy approach. Though capable of supporting growth-oriented measures, his reputation for prioritizing inflation control over accommodative policy led markets to reassess expectations around future monetary easing.
Price Action and Market Dynamics
Spot gold fell nearly 10% from recent record levels, dropping below key psychological price points that had underpinned the rally through late 2025. This marked one of the most substantial single-session corrections in precious metals seen in recent market history, driven in part by profit-taking and liquidation of overextended positions after gold’s pronounced ascent.
Silver and other base metals were even harder hit, with broad selling observed across the metals complex as traders recalibrated portfolios. The surge in the U.S. dollar index, reflecting renewed confidence in the currency, also exerted downward pressure on dollar-denominated commodities like gold and silver.
Macro and Asset Allocation Impact
The sell-off rippled through related markets. Gold mining equities and metal-linked exchange-traded products saw notable drawdowns as benchmark prices corrected. Broad equity markets exhibited increased volatility amid mixed reactions to speculation about Federal Reserve leadership and adjustments to the rate outlook.
Analyst View
Analysts attribute the sharp correction to a combination of hawkish monetary repricing, speculative unwinding, and technical selling, rather than a fundamental downturn in gold’s longer-term demand drivers. While near-term volatility may persist as markets digest leadership news and policy signals, gold’s appeal as a strategic hedge against inflation and economic uncertainty remains structurally intact.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media, such as images or music, used on this platform are either owned by Kapitales Research, obtained through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au
x
Daily Dose of Buy, Sell & Hold recommendations before the market opens.
Start Your 7 Days Free Trial Now!
We use cookies to help us improve, promote, and protect our services.
By continuing to use this site, we assume you consent to this.
Read our
Privacy Policy
and
Terms & Conditions
Gold Plummets Near 10% After Trumps Fed Chair Nomination Sparks Hawkish Repricing
Key Highlights
• Gold prices slid sharply—approximately 9–10%—following the announcement that President Donald Trump intends to nominate Kevin Warsh as Federal Reserve Chair.
• The US dollar strengthened on expectations of a more hawkish Fed stance, prompting profit-taking in precious metals.
• Silver and other metals also experienced significant declines, reflecting broader risk repricing across commodities markets.
Geopolitical and Policy Trigger
Gold, which had recently reached multi-year highs, experienced one of its steepest short-term declines in decades following reports that President Trump would nominate former Fed Governor Kevin Warsh to lead the Federal Reserve. Markets interpreted the nomination as a shift toward a more traditional central banking stance—potentially less inclined to aggressive rate cuts or unconventional stimulus—reducing safe-haven demand for gold and other precious metals.
Warsh’s extensive tenure at the Federal Reserve during the 2008 financial crisis shaped perceptions of his likely policy approach. Though capable of supporting growth-oriented measures, his reputation for prioritizing inflation control over accommodative policy led markets to reassess expectations around future monetary easing.
Price Action and Market Dynamics
Spot gold fell nearly 10% from recent record levels, dropping below key psychological price points that had underpinned the rally through late 2025. This marked one of the most substantial single-session corrections in precious metals seen in recent market history, driven in part by profit-taking and liquidation of overextended positions after gold’s pronounced ascent.
Silver and other base metals were even harder hit, with broad selling observed across the metals complex as traders recalibrated portfolios. The surge in the U.S. dollar index, reflecting renewed confidence in the currency, also exerted downward pressure on dollar-denominated commodities like gold and silver.
Macro and Asset Allocation Impact
The sell-off rippled through related markets. Gold mining equities and metal-linked exchange-traded products saw notable drawdowns as benchmark prices corrected. Broad equity markets exhibited increased volatility amid mixed reactions to speculation about Federal Reserve leadership and adjustments to the rate outlook.
Analyst View
Analysts attribute the sharp correction to a combination of hawkish monetary repricing, speculative unwinding, and technical selling, rather than a fundamental downturn in gold’s longer-term demand drivers. While near-term volatility may persist as markets digest leadership news and policy signals, gold’s appeal as a strategic hedge against inflation and economic uncertainty remains structurally intact.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media, such as images or music, used on this platform are either owned by Kapitales Research, obtained through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au