Gold and silver prices on exchanges have fallen sharply: main factors
31 January 16:15
Gold and silver prices experienced a sharp decline on global markets on Friday, January 30. During trading, gold fell 12 percent, dropping below the psychological mark of $5,000 per ounce. For gold, this was the most significant intraday drop since the early 1980s — that is, in 40 years, according to "Komersant Ukrainian", citing DW.
The situation with silver was even more dramatic, with its price falling by 36 percent in a single day. This was an absolute record for the largest intraday drop in the history of this metal. It is noteworthy that both assets showed steady growth throughout 2025, and in January the rally intensified: earlier this week, gold rose by $220 per day.
The Fed factor
The sharp reversal in prices is explained by the reduction in uncertainty surrounding appointments to the US Federal Reserve (Fed). Previously, prices had soared due to investor fears that Donald Trump would appoint a candidate to head the regulator who would be ready to cut rates at the first request, which would lead to a fall in the dollar and a rise in inflation.
However, reports emerged yesterday that Kevin Warsh, a former Fed governor and Trump ally, would be nominated for the position. Markets interpreted his nomination as a signal of predictable monetary policy. Against this backdrop, the dollar strengthened, undermining demand for precious metals.
Although Warsh has publicly advocated for lower interest rates, experts consider him a reliable candidate compared to other possible White House nominees.
Geopolitical tensions
Before Friday’s collapse, precious metals were rising in price amid general instability caused in particular by Washington’s actions. Market concerns were provoked by Trump’s aggressive trade policy, the conflict in the Gaza Strip, the war in Ukraine, as well as the kidnapping of Venezuelan ruler Nicolas Maduro and the US president’s threats to annex Greenland.
In this environment, investors and central banks around the world actively invested in gold as a safe-haven asset. Experts note that many countries are increasing their gold reserves to reduce their dependence on US policy and protect their assets from possible sanctions.
