Gold and silver, which had been on a sustained rally and repeatedly刷新ed records, experienced a sharp sell-off on Friday. Reports that the Trump administration is preparing to nominate Kevin Warsh as Federal Reserve Chairman boosted the U.S. dollar. Silver prices plummeted over 16%, approaching $96 per ounce, while gold fell more than 7%, breaking below the $5,000关口, intensifying the violent swings in this market cycle, halting the record-breaking ascent, and putting pressure on technical indicators. The U.S. Dollar Index rose as much as 0.5%, making precious metals more expensive for most buyers. Both silver and platinum registered declines exceeding 10%. At the time of writing, silver was down 14.11% at $99, and gold was down 5.75% at $5,063. It is understood that U.S. President Donald Trump is expected to nominate Warsh for the Fed Chair position. This former Federal Reserve Governor is renowned as an "inflation hawk," but has publicly supported interest rate cuts in recent months, aligning his stance more closely with Trump's. Trump stated he would announce the nominee on Friday morning U.S. time. OCBC Bank strategist Christopher Wong commented, "Gold's movement confirms the warning that 'a sharp rise inevitably leads to a sharp fall'." He noted that while reports about Warsh's nomination served as the trigger, a market correction was already imminent. "It's as if the market was just waiting for an excuse to cool off those parabolic gains." Given the substantial increases in gold and silver prices year-to-date, some technical indicators had already been flashing warning signals. One such indicator is the Relative Strength Index (RSI), which in recent weeks suggested both metals were potentially overbought and facing corrective pressure. Gold's RSI recently hit 90, its highest level in decades. Even after this pullback, gold is still up approximately 17% for January, nearing its strongest monthly performance since 1980. Silver's rally has been even more dramatic, surging 43% so far this year. The Trump administration's disruptive actions regarding the global order, including the arrest of a Venezuelan leader, threats to annex Greenland, and imposing tariffs on allies, have been key drivers behind gold's ascent. Recently, Trump warned of a potential strike on Iran and stated he would tax any country providing oil to Cuba. Concurrently, Trump reached a temporary agreement with Senate Democrats, averting the risk of another U.S. government shutdown. The White House continues negotiations with Democrats regarding new restrictions on immigration raids, which had previously sparked nationwide protests.
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