Fed fears grip markets: Gold and silver tumble sharply from record highs<

Investor profit-taking intensified after U.S. President Donald Trump said he could announce his nominee for Federal Reserve chair today, triggering sharp declines in gold and silver prices.

Trump made the comments while attending the premiere of the film “Melania” at the Kennedy Center, responding to questions from reporters about the timing of the Fed chair announcement.

Fed chair speculation sparks sell-off

Trump’s indication that the announcement could come as early as this morning prompted investors to lock in gains following the recent rally in precious metals.

After hitting an all-time high of $5,598 per ounce, gold fell to as low as $5,112 before trading around $5,224, down 3.2% on the day.

Silver prices also dropped more than 5% to $108, before recovering slightly to trade at $111.34, still down 4.53%.

Monthly performance remains strong

Despite the pullback, gold is up more than 20% so far in January, heading for a sixth consecutive monthly gain and its strongest monthly performance since January 1980.

Silver, meanwhile, is on track for a nearly 50% monthly gain, marking one of the strongest rallies in its history.

Analysts urge caution

KCM Trade Chief Market Analyst Tim Waterer said the prospect of a less dovish Fed chair has supported the dollar and accelerated the correction from overbought conditions.

StoneX Senior Analyst Matt Simpson added that rumors of Kevin Warsh becoming Fed chair weighed on gold prices during Asian trading hours.

Yardeni Research President Ed Yardeni noted that a pullback toward $5,000 and some consolidation would be normal in a bull market, highlighting how unusual the move from $3,000 to $5,500 without major corrections had been.

Potential Fed chair candidates

Names reportedly under consideration include Kevin Hassett, Christopher Waller, Kevin Warsh, and BlackRock executive Rick Rieder.

Current Fed Chair Jerome Powell’s term is set to end in May.