Gold and Silver Prices Plunge in a Day... Profit-Taking Amid Trump's Fed Chair Nomination

The international gold and silver prices, which had been on a recent surge, plummeted by more than 10% in just one day. This is interpreted as a result of investors engaging in profit-taking after U.S. President Donald Trump nominated former Fed director Kevin Wash, who is considered to have a relatively less dovish stance, as the next Federal Reserve (Fed) chair candidate.

According to Reuters on the 30th (local time), the spot price of gold fell by 9.5% from the previous session, trading at $4,883.62 per ounce. This comes just a day after it surpassed the $5,500 mark for the first time, soaring to $5,594.82. The closing price of April gold futures on the New York Mercantile Exchange (COMEX) also dropped by 11.4% to $4,745.10 per ounce.

After surpassing the $5,000 mark per ounce for the first time on the 26th, gold prices continued to rise due to concerns over the infringement of the Fed's independence and the weakness of the dollar. However, as expectations grew that the likelihood of a rapid easing of Fed monetary policy would decrease, the atmosphere changed dramatically.

The adjustment in silver prices was even more pronounced. The spot price of silver traded at $83.99 per ounce, down 27.7% from the previous session, falling below the $100 mark. Silver prices had surged over 150% last year and continued to rise this year, but this sharp drop has raised concerns about short-term overheating. However, as of this month, silver is still up about 17%.

The sell-off spread across precious metals, with platinum falling by 19.18% and palladium by 15.7%, among other metals experiencing significant declines.

On Wall Street and beyond, former director Wash has been regarded as the most reliable 'safe choice' among the candidates for the next Fed chair. With concerns that President Trump might nominate a more dovish figure than expected, the selection of a candidate closer to a hawkish stance has weakened the preference for safe assets.

Meanwhile, the value of the dollar rebounded. As of 3:20 PM Eastern Time, the dollar index, which indicates the value of the dollar against six major currencies, rose by 0.8% to 97.07. The dollar index had recently fallen to its lowest level in four years due to the controversy over the Fed's independence and President Trump's comments about the merger with Greenland, shaking confidence in dollar assets.