Silver plunged over 30% in 24 hours to below $80 per ounce. Gold also fell, but by a smaller margin.
Analysts blamed heavy profit-taking, overbought conditions and a stronger U.S. dollar for the sharp correction.
The drop surprised investors after metals had surged in recent months. (Ed. note: gold more than doubled since last year and silver nearly quadrupled over the same period.)
Spot silver had eased 2.1% to $114.14 after reaching $121.64, and was up more than 60% for the month on supply deficits and momentum buying. Traders say momentum buying amplified recent gains.
Early Friday, President Trump announced plans to nominate Kevin Warsh as the next Federal Reserve chair, prompting selling of precious metals in favor of the dollar. Warsh served as a Fed governor from 2006 through 2011, is described as having a hawkish record, and is considered likely to preserve Fed independence while supporting the administration’s dollar and rate aims.
Investors shifted toward the U.S. dollar and stocks amid the news. Traders now await the January U.S. jobs report due Feb. 6 from the U.S. Bureau of Labor Statistics for signals on rate-cut pricing.
