Gold Set for Steepest Daily Drop Since 1983 as Silver Faces Historic Rout
New York – Gold prices suffered a dramatic reversal, marking their sharpest single-day decline in more than four decades as global markets reacted to a major shift in United States monetary leadership. The sudden selloff came after strong gains earlier in the week had pushed bullion to record highs.
Investors moved swiftly to reassess risk after the announcement of a new Federal Reserve chair, triggering volatility across precious metals markets. The decision altered expectations around interest rates, inflation control, and future monetary tightening.
Spot gold plunged sharply after touching an all-time high just a day earlier, highlighting how sensitive the metal remains to policy signals. The scale of the decline made it the steepest daily fall since 1983, underscoring the shock felt across trading floors.
Silver experienced even more extreme pressure, collapsing by nearly a third in value and heading toward its worst trading day on record. The industrial metal, often more volatile than gold, amplified the broader market reaction.
Despite the dramatic daily losses, precious metals remained on track for gains over the month, reflecting strong demand earlier in the period. Safe-haven buying, geopolitical uncertainty, and inflation concerns had supported prices until the abrupt reversal.
The announcement of Kevin Warsh as the new Federal Reserve chair prompted traders to price in a potentially more hawkish policy outlook. Markets interpreted the move as a signal that interest rates could remain higher for longer than previously expected.
Higher interest rates tend to weigh on non-yielding assets such as gold and silver. As a result, investors shifted capital toward the dollar and interest-bearing instruments.
The U.S. dollar strengthened following the announcement, adding further pressure to metal prices. A stronger dollar makes commodities priced in dollars more expensive for overseas buyers, dampening demand.
Gold futures also recorded a sharp fall, settling well below recent highs and confirming the bearish momentum. Trading volumes surged as stop-loss orders were triggered across exchanges.
Silver’s decline was compounded by concerns over industrial demand, particularly in sectors linked to manufacturing and renewable energy. Fears of slower global growth added to the negative sentiment surrounding the metal.
Market analysts noted that the speed of the selloff reflected crowded positioning after weeks of aggressive buying. When sentiment turned, the exit was swift and disorderly.
Volatility spilled into related markets, including mining stocks and exchange-traded funds linked to precious metals. Shares of major producers fell as investors reassessed near-term price expectations.
Some traders cautioned against viewing the drop as a long-term trend reversal. They pointed out that structural factors such as central bank buying and geopolitical risks remain supportive over time.
Others warned that further downside could emerge if economic data reinforces expectations of tighter monetary policy. Upcoming inflation and employment reports will be closely watched.
The episode highlighted how political and policy announcements can rapidly reshape market dynamics. Even assets traditionally seen as stable stores of value are not immune to sudden repricing.
Gold’s record highs earlier in the week reflected deep uncertainty and strong speculative interest. The sharp correction served as a reminder of the risks inherent in momentum-driven rallies.
Silver’s historic plunge underscored its dual role as both a precious and industrial metal. That dual nature makes it particularly vulnerable during periods of economic reassessment.
As markets digest the leadership change at the Federal Reserve, volatility is expected to remain elevated. Investors are likely to stay cautious until clearer guidance emerges on the future path of policy.
The coming weeks may determine whether precious metals resume their upward trajectory or enter a period of consolidation. For now, traders are bracing for continued swings as macroeconomic signals evolve.
