Gold and silver prices, which have significantly risen over the past year, experienced their sharpest decline in recent years on Friday, reports LETA.
During the trading session, the price of gold fell by 11.4%, dropping to $4,745.10 per ounce. This marked the sharpest one-day decline since the financial crisis of 2008 and even since the early 1980s, reported Bloomberg.
The price of silver decreased by 31.4% — also the largest daily drop — to approximately $82 per ounce.
Prior to this, prices for both precious metals had repeatedly set records. Over the past 12 months, the price of gold had doubled, surpassing the $5,000 per ounce mark for the first time on Monday, and briefly reaching around $5,600 per ounce on Thursday.
The price of silver reached an all-time high on Thursday — over $120 per ounce.
Precious metals are considered a reliable investment. Their prices began to fall on Friday after information emerged, which was later confirmed, that U.S. President Donald Trump nominated former Federal Reserve Board member Kevin Warsh to head the Federal Reserve System (Fed).
If the Senate approves Warsh's nomination, he will replace Jerome Powell as Fed chair when his term expires in May. Trump nominated Powell to this position in 2017 but has repeatedly criticized him over the past year for what he believes is the Fed's slow pace in lowering interest rates.
Kathleen Brooks, director of research at trading group XTB, called Warsh's nomination an "interesting choice" that "could give the market hope for the Fed's independence to be maintained."
Trump's personal attacks on Powell have heightened investor fears that the Fed's independence may be at risk. These concerns have contributed to rising gold prices and a weakening U.S. dollar over the past year.
Gold prices and those of other precious metals rose as investors sought more reliable investment options amid various risks, including potential threats to Fed independence, an overvalued U.S. stock market, tariff threats, and high government debt.
Due to the decline in precious metal prices on Friday, shares of mining company Newmont fell by 11.5%, while shares of another industry company, Freeport-McMoRan, dropped by 7.5%.
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