Gold and silver prices fell sharply on Friday, while European stock markets rose, after US President Donald Trump announced his choice to lead the Federal Reserve, easing investor concerns about the central bank’s independence.
Trump confirmed on his Truth Social platform that he will nominate former Fed official Kevin Warsh to replace Jerome Powell as chair. In his post, Trump praised Warsh as a potentially great chairman and described him as “central casting,” suggesting a return to conventional central banking leadership. The nomination, if confirmed, would mark a significant shift from Trump’s previous public criticism of Powell, which had raised alarms about potential political interference in monetary policy.
Precious metals, traditionally viewed as safe-haven assets during times of uncertainty, sold off on the news. Gold dropped to $5,130.80 an ounce after hitting a record high of $5,595.47 the previous day. Silver also fell, trading at $103.49 an ounce after reaching an all-time peak above $120 on Thursday. Analysts noted that the perceived reduction in policy uncertainty diminished the appeal of haven assets. “The interesting pick… may give the market some hope that Fed independence will be preserved,” said Kathleen Brooks, research director at XTB trading group.
European equities responded positively. The FTSE 100 rose 0.5%, the CAC 40 gained 0.8%, and Germany’s DAX climbed 1.0%. The move contrasted with losses in Asia, where the Hang Seng fell 2.1% and the Shanghai Composite dropped 1.0%. The Nikkei in Tokyo was down 0.1%. US markets were mixed, with the Dow Jones Industrial Average closing up 0.1%.
The broader market landscape remained volatile. Earlier in the week, stocks were buoyed by strong earnings from tech giants like Meta and Samsung. However, sentiment soured after Microsoft announced increased AI infrastructure spending, renewing fears that the technology investments may not yield near-term profits and that valuations could be stretched. Financial markets have also been navigating a weaker US dollar, renewed tariff threats from Trump, and tensions with Iran.
Oil prices declined, with Brent crude falling 0.8% to $69.09 per barrel and West Texas Intermediate dropping 0.7% to $65.03. This followed a surge on Thursday after Trump threatened military action against Iran.
Currency markets showed modest movement. The euro weakened to $1.1949, the British pound slipped to $1.3779, while the US dollar strengthened against the Japanese yen to 153.89.
The week’s fluctuations underscore how political appointments and geopolitical statements continue to drive short-term market sentiment. Warsh’s nomination will be closely scrutinised for signals on the Fed’s future policy path, particularly regarding inflation and interest rates. His confirmation process and early remarks are expected to influence asset prices in the coming weeks as investors assess the trajectory of US monetary policy and global economic stability.
