Precious metals markets endured a brutal reversal on January 30, 2026, as silver prices plunged 15% to below $100 an ounce and gold tumbled 7% under $5,100, hammering miners and exchange-traded funds in the process. The trigger: intensifying speculation that President Donald Trump would nominate former Federal Reserve Governor Kevin Warsh as the next Fed chair, a move markets interpreted as signaling tighter policy ahead.

Silver settled around $98.66 per ounce after breaching the key $100 level, with spot quotes at $103.67 down over 10%. Gold traded at $5,009, off sharply from recent records above $5,600. Platinum shed more than 14%, and palladium dropped nearly 12%, according to data compiled from the CNBC report. Miners felt the sting immediately, with London’s Fresnillo down 7% and U.S. pre-market names like Endeavour Silver off 14.7%.

ETFs bore the brunt: ProShares Ultra Silver plunged 25%, while iShares Silver Trust lost 12.7%. The Stoxx 600 Basic Resources index fell 3.2% in Europe, reflecting broad sector pain.

Trump’s Fed Chair Tease Ignites Volatility

President Trump announced he would reveal Jerome Powell’s successor that morning, with Warsh emerging as the clear favorite. Prediction markets like Polymarket pegged his odds at 94%, up from 35%, after reports of a White House meeting between Warsh and Trump, as noted by Reuters. “I’ll be announcing the Fed chair tomorrow morning … somebody that’s known to everybody in the financial world,” Trump told reporters, per ABC News.

Warsh, who served from 2006 to 2011 during the financial crisis, has criticized prolonged Fed balance sheet expansion and advocated for a smaller footprint, raising fears of less aggressive rate cuts. Markets had priced in a dovish pick amid elevated inflation and Trump’s public pressure for lower rates, but Warsh’s hawkish reputation flipped sentiment.

“Rumours that Kevin Warsh will replace Jerome Powell as Fed Chair have weighed on gold during Asian trade,” said Matt Simpson, senior analyst at StoneX, cited in TRT World.

Dollar Rebound Fuels the Selloff

The U.S. dollar index jumped 0.3% to 96.56, reversing a prior unwind that had propped up metals. A stabilizing greenback, combined with profit-taking after historic rallies—gold up 65% and silver 150% in 2025—amplified the downturn. Year-to-date 2026 gains of 37% for silver and 15.4% for gold evaporated in hours.

Katy Stoves, investment manager at Mattioli Woods, attributed the drop to “a market-wide reassessment of concentration risk,” likening gold’s crowding to AI tech stocks. “When everyone is leaning the same way, even good assets can sell off as positions get unwound,” she told CNBC.

Toni Meadows, head of investment at BRI Wealth Management, noted central bank buying had tailed off, though Trump’s trade policies still argue for reserve diversification. Claudio Wewel of J. Safra Sarasin called it a “perfect storm” reversal from geopolitical boosts like U.S. actions in Venezuela, Greenland, and Iran threats.

Miner and ETF Carnage Deepens

First Majestic Silver shares cratered 14.4% pre-market, dragging the sector lower. Gold remained on pace for its best monthly gain since 1980 despite the plunge, with spot gold down 7.5% to $4,992 but up over 15% for January, per Reuters. Silver mirrored gold but with amplified volatility due to thin inventories and industrial demand worries.

Christopher Wong of Oversea-Chinese Banking Corp. described the move as validating a “cautionary tale of fast-up, fast-down,” with Warsh reports as the catalyst in a Bloomberg-cited analysis. Damien Boey of Wilson Asset Management highlighted Warsh’s preference for lower rates but paired with balance sheet shrinkage: “The markets are reacting as if thinking: ‘What would the world look like with a smaller Fed balance sheet?’”

Broad market ripples emerged: S&P 500 e-mini futures slid 0.7%, Nasdaq off 0.9%. Bond yields steepened, reflecting bets on less yield suppression.

Geopolitical Backdrop and Rally Roots

Precious metals had surged on Trump’s disruptive policies—seizing Venezuela’s Nicolas Maduro, Greenland annexation threats, Iran tensions—prompting diversification from U.S. assets, especially by China and Russia-aligned nations. Central banks added aggressively, with China’s holdings at record levels, fueling ETF inflows of $89 billion in 2025 per the World Gold Council.

Silver’s industrial role amplified its run, designated a critical U.S. mineral amid supply squeezes. Yet, positioning extremes invited unwinding, as Stoves warned. Bloomberg reported the Trump administration preparing Warsh’s nomination, boosting the dollar and pressuring non-yielding metals.

Analysts like Ole Hansen of Saxo Bank maintain bullish 2026 outlooks post-correction, citing enduring drivers. HSBC lifted its silver forecast to $68.25, while Goldman Sachs flagged squeeze risks.

Looking Beyond the Plunge

Warsh’s potential clashes with Trump’s growth agenda—amid DOJ probes into Powell and Fed autonomy fights—could test dollar confidence long-term. Metals partially recovered intraday, with some X posts noting 40-50% bounces, underscoring resilient demand. Miners like Hindustan Zinc and Vedanta bled in sympathy, but bargain hunters eyed rebounds.

Friday’s Producer Price Index data loomed, alongside Trump’s formal announcement. For industry insiders, this rout signals repositioning in a market where geopolitics, Fed shifts, and dollar dynamics collide. Metals’ monthly gains persist, hinting the bull may merely pause.