Gold Price Tumble as Investors Soothed by Trump Fed Pick

AFP/APP

New York: Gold and silver prices dived on Friday, while European stock markets ended the week higher and Wall Street pulled back, as investors were reassured by US President Donald Trump’s pick to take over as head of the Federal Reserve.

The precious metals — traditionally viewed as safe-haven investments — had already begun sliding on reports, later confirmed, that Trump had nominated former Fed official Kevin Warsh to replace Jerome Powell as chair of the US central bank.

Trump announced his choice on Friday via social media, saying that Warsh, a former Morgan Stanley investment banker and Federal Reserve governor, “will go down as one of the GREAT Fed Chairmen, maybe the best.”

Kathleen Brooks, research director at XTB trading group, said the “interesting pick… may give the market some hope that Fed independence will be preserved.”

Trump’s repeated personal attacks on outgoing Fed chair Jerome Powell, who is set to depart in May, had fuelled fears among investors that the central bank’s policy independence was under threat — potentially stoking inflation risks for the US economy.

A Roller-Coaster Week

Precious metals prices tumbled on Friday after surging in recent days as investors sought safe-haven assets amid uncertainty over Trump’s policies.

Gold fell as much as 12 percent at one point, slipping below $5,000 an ounce after hitting a record high near $5,600 on Thursday.

Silver, which reached an all-time peak above $120 an ounce on Thursday, shed around 30 percent to about $82 an ounce.

Financial markets endured a volatile week, driven by a weaker dollar, Trump’s threats against Tehran, renewed tariff warnings, and concerns over a potential US government shutdown.

Asian stock markets closed the week with notable losses following Thursday’s tech-led retreat on Wall Street amid renewed worries over massive investments in artificial intelligence.

Strong earnings from Meta, Samsung and SK Hynix buoyed markets earlier in the week, but Microsoft shares fell after concerns emerged that its costly AI initiatives may not deliver expected financial returns.

There are growing fears that corporate valuations may be overstretched, raising concerns of a potential market bubble after years of tech-fuelled gains.

The dollar strengthened following Warsh’s nomination.

“Most currency strategists would argue that his nomination may be good news for the dollar, which can price out some risks of a more dovish pick,” said Forex.com analyst Fawad Razaqzada.

“However, as long as policy uncertainty persists — particularly due to Trump’s tariff theatrics — the dollar debasement narrative is likely to prevent a meaningful rebound,” he added.

Among individual stocks, Verizon surged 11.8 percent after reporting its strongest quarterly growth in mobility and broadband subscriptions since 2019.

Key Figures at Around 2110 GMT

New York

Dow Jones: Down 0.4% at 48,892.47

S&P 500: Down 0.4% at 6,939.03

Nasdaq Composite: Down 0.9% at 23,461.82

Europe

London FTSE 100: Up 0.5% at 10,223.54

Paris CAC 40: Up 0.7% at 8,126.53

Frankfurt DAX: Up 0.9% at 24,538.81

Asia

Tokyo Nikkei 225: Down 0.1% at 53,322.85

Hong Kong Hang Seng: Down 2.1% at 27,387.11

Shanghai Composite: Down 1.0% at 4,117.95

Currencies

Euro/Dollar: $1.1856 (down from $1.1929)

Pound/Dollar: $1.3688 (down from $1.3772)

Dollar/Yen: 154.64 yen (up from 153.61)

Euro/Pound: 86.63 pence (up from 86.62)

Commodities

Brent crude: Down <0.1% at $70.69 per barrel

WTI crude: Down 0.3% at $65.21 per barrel

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