"Warsh is different"—as fears ease, runaway gold and silver prices 'crash'

Warsh named as Fed chair nominee

Wall Street ends lower…gold, silver plunge

U.S. stocks fell on the 30th (local time) after President Donald Trump nominated former Fed Governor Kevin Warsh as the next chair of the U.S. central bank (the Fed, the Federal Reserve). With Warsh’s nomination seen as easing concerns about infringement on the Fed’s independence compared with the scenario in which other prominent pro-Trump candidates were selected, international gold and silver prices halted their sharp rally.

In New York trading, the Dow Jones Industrial Average closed at 48,892.47, down 179.09 points (-0.36%) from the previous session. The S&P 500 ended at 6,939.03, down 29.98 points (-0.43%), while the tech-heavy Nasdaq Composite finished at 23,461.82, down 225.30 points (-0.94%).

Warsh, nominated by Trump as the next Fed chair, is known as a figure with strong credibility on Wall Street. Trump wrote on his Truth Social account, "I have known Kevin for a long time and I have no doubt that he will be one of the great Fed chairs, perhaps the best."

In and around Wall Street, Warsh had long been viewed as the "safest choice" among the potential candidates for the next Fed chair. He has held key posts across markets and government agencies, including as a Fed governor, and previously showed a hawkish (monetary tightening) stance on controlling inflation.

Analysts said that if Warsh takes office as the next Fed chair, the Fed is likely to move toward rate cuts in the short term, while over the longer term he is expected to safeguard the Fed’s independence and pursue credible monetary policy. Stephen Brown, deputy chief North America economist at Capital Economics, wrote in an investor note, "Warsh’s nomination is one of the better outcomes for investors compared with the other names that had been discussed."

Meanwhile, the decline in the indexes was led by tech shares. Microsoft (MS) fell 0.81%, extending losses after a sharp drop the previous day, while other major Big Tech names such as Meta (-2.95%) and Amazon (-1.01%) also traded lower.

International gold and silver prices slid sharply, while the U.S. dollar strengthened. According to Reuters, spot gold tumbled 9.5% from the previous session to $4,883.62 an ounce. It came just one day after the metal hit a record high of $5,594.82, having for the first time ever broken above $5,500 an ounce. Spot silver fell 27.7% to $83.99 an ounce, dropping back below $100 an ounce.

The U.S. dollar index, which reflects the dollar’s value against six major currencies on ICE Futures U.S., rose 0.9% from the previous session to 97.13 around the time U.S. stocks closed. The dollar had fallen to its lowest level in four years earlier this week as confidence in dollar assets weakened following concerns over infringement on the Fed’s independence and President Donald Trump’s threat to annex Greenland.

Kim So-yeon, Hankyung.com reporter sue123@hankyung.com