The Warsh Jolt: Why Gold And Silver, Just Suffered A Historic Meltdown

Last Updated on January 30, 2026 by Deon

The Weight of Rule: Gold and Silver Crash Down from All-time Highs

As they say in the markets, what zips up like a rocket is apt to drop like a stone. Following a month with highs in Gold of 5,626 is the high $121 for Silver The “parabolic rally” ultimately met an unfortunate ended. Friday’s rush for the exits on the precious metals market was said to have been its most brutal single-day sell-off in more than a decade.

The catalyst? One post, on Truth Social. And here’s how the nomination of Kevin Warsh for Fed Chairman shattered the bullion market.

The Return of the Hawk

Markets reacted to President Trump’s decision in May to nominate Kevin Warsh instead of Jerome Powell as the next chairman with a mixture of “good news, bad news.

The Good: Warsh is a Fed insider and Wall Street guy with knowledge. His nomination quickly squelched fears that the Fed might lose its independence or fall under the control of a “political stooge.”

The “Hawkish” Tilt: Warsh is a famously hawkish anti-inflation wonk who prefers a smaller Fed balance sheet. This indicated to investors that the era of “easy money” and aggressive rate cuts could be ending sooner than anticipated.

The Dollar Strikes Back

The rally in gold and silver was largely driven by a “dollar debasement” trade — the notion that the U.S. currency was losing value.

Rebound: When Warsh’s name hit the wires, DXY broke its losing streak and rallied.

The Inverse Rule: Gold and silver are priced in dollars, so a stronger Greenback makes them more expensive for overseas shoppers. This “double whammy” of a higher dollar and increased Treasury yields caused a stampede out of non-yielding assets.

Forced Liquidation Whether it’s the, $100 is a line in the sand.

The technical wreckage was swift and brutal.

Silver’s Crash: Silver was decimated, tanking more than 14% and breaking the all-important $100 level. This move set off a wave of what’s known as “forced liquidation,” in which traders who had essentially bet their chips would keep growing infinitely were clobbered with margin calls Verdict: A Salubrious Reset or the End of the Trend?

The fundamentals have not totally changed, despite the “blood on the floor.” Geopolitical tensions are tense, and the “Sell Aand forced to sell at any price.

Gold $5000 Floor: Gold sank almost 7%, with a short test down towards the $5000 floor. Analysts said that after a 20% rise in just 30 days, the market was simply “overheated” and seeking any grounds for taking profits.

The merica” trade still has its adherents. But the nomination of a credible, market-friendly Fed Chair has helped take some wind out of the bubble.

For now the market is looking for Gold to hold $5,000 and Silver at $100. If such “lines in the sand” hold, this crash could prove to befall members of the financial media actually do get what they want, but it’s more than likely to go down as one of the most expensive “buying opportunities” of 2019.