The Gold Trust iShares (IAU) experienced a sharp pre-market decline of 5.48%, mirroring a broad selloff in precious metals. The move followed a period of record-breaking gains for gold.
The selloff was triggered by reports that the Trump administration is preparing to nominate former Federal Reserve Governor Kevin Warsh for the position of Fed Chair. Market participants viewed this potential nomination as hawkish, leading to a significant boost in the U.S. dollar. A stronger dollar makes dollar-denominated assets like gold more expensive for holders of other currencies, prompting widespread selling across the precious metals complex.
Analysts noted that the sharp correction also reflected profit-taking activity after gold's parabolic rise to new all-time highs above $5,500 per ounce earlier in the week. The rapid price advance had pushed technical indicators into overbought territory, increasing the market's vulnerability to a pullback.
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