Gold, Silver Prices Tumble on Warsh Fed Pick, Worst Since 1980 – February 01
Gold silver prices tumbled on February 1 after Donald Trump named Kevin Warsh as his Federal Reserve pick, boosting the US dollar and sparking rapid deleveraging. Silver crashed 30%, its worst one-day drop since 1980, while gold fell sharply as safe-haven bets unwound. For Singapore investors, the USD surge and tighter margin conditions raise near-term risks across bullion, ETFs, and miners. We explain what drove the move, what to watch next, and how to position amid high volatility in gold prices today and silver prices today.
What drove the sudden plunge
Trump’s pick of Kevin Warsh as Fed chair sparked a sharp mood shift, easing fears of policy unpredictability and lifting risk assets. With safe-haven demand fading, leveraged longs in metals rushed to exit, triggering margin calls and cascading sell orders. Silver slumped 30% in its worst day since 1980 as liquidity thinned, amplifying the slide source. The rapid unwind pressured gold silver prices across futures and spot markets.
A stronger USD and higher real yields typically weigh on non-yielding metals. Warsh’s nomination lifted the dollar, making bullion pricier for non-USD buyers and prompting more selling. The shift in rate expectations reduced hedging demand and added to the reversal in silver gold prices. Regional investors tracked the dollar-led move as metals fell broadly source. The USD path remains central for gold silver prices near term.
How this affects Singapore investors
Gold and silver are quoted in USD, so SGD-based buyers face a double hit when the dollar rises. Wider spreads and intraday swings can lift trading costs, while brokers may raise margin requirements. For retail investors in Singapore, consider smaller order sizes, staged entries, and clear stop-loss levels. Price gaps can be large at Asia open, so use limit orders. These steps help manage risk as gold silver prices stay jumpy.
SG investors often access metals via global ETFs and overseas miners. Miners typically move more than spot due to operating and leverage factors. If volatility persists, ETFs could trade at premiums or discounts to NAV during fast markets. Local jewellery demand may be mixed if prices gap lower. We suggest investors review fund liquidity, hedging costs, and currency risk as gold silver prices reset after the shock.
Key levels and scenarios to watch
When markets drop fast, brokers and venues can tighten risk controls, which forces more deleveraging. Watch open interest and daily volume for signs of stress and stabilization. If forced selling fades, prices can base and mean-revert. If the USD rally extends, metals may retest lows. Clarity on positioning will help gauge whether gold silver prices have flushed out weak longs.
Near-term drivers include US jobs, inflation, and incoming Fed commentary, which shape the USD and real yields. Any hint of slower growth or easier policy could support a rebound. Conversely, hawkish tones may keep pressure on metals. Asia liquidity pockets matter for entries and exits. We expect event risk to keep gold silver prices sensitive to headlines over the coming sessions.
Tactics for risk and opportunity
Focus on liquidity windows, tight execution, and defined downside. Track USD/SGD, Treasury yields, and spot-futures basis for signals. Use limit orders and avoid chasing large candles. Consider partial profit-taking around prior breakdown zones. If volatility jumps, reduce leverage. A rules-based approach improves odds when gold silver prices move in wide ranges.
Volatility can offer better entry levels for strategic holdings. Set allocation caps, use dollar-cost averaging, and keep a cash buffer for dips. Review currency exposure and consider SGD-hedged options if costs are reasonable. Rebalance into weakness rather than sizing up after spikes. A disciplined plan helps maintain exposure while managing drawdowns in gold silver prices.
Final Thoughts
The sharp drop in metals began with a policy shock: Kevin Warsh’s Fed nomination lifted the USD, slashed safe-haven demand, and forced leveraged positions to unwind. Silver’s 30% plunge, the worst since 1980, shows how quickly liquidity can vanish. For Singapore investors, currency effects, margin changes, and wider spreads are the key near-term risks. Focus on execution discipline, smaller sizing, and clear risk limits. For longer horizons, staged entries and balanced allocations make sense while uncertainty around the USD and yields persists. Stay data-driven, watch upcoming macro prints and Fed signals, and reassess if volatility shifts. With careful planning, investors can protect capital and find selective opportunities as gold silver prices stabilize.
FAQs
Why did gold and silver fall so sharply today?
Trump’s nomination of Kevin Warsh as Fed chair boosted the US dollar and lifted rate expectations. Safe-haven demand faded, and leveraged long positions unwound. That forced selling, tighter margins, and thin liquidity drove a fast move lower, with silver down 30% in its worst day since 1980, and gold also falling sharply.
What does this mean for Singapore investors?
USD strength raises local buying costs and can widen spreads. Brokers may tighten margins, increasing cash needs. Review trade size, use limit orders, and set stop-losses. For longer-term holders, consider staged entries and watch USD/SGD, yields, and liquidity as you assess gold prices today and silver prices today.
Are ETFs safer than holding bullion during volatility?
ETFs offer liquidity and ease of trading, but prices can deviate from net asset value during fast markets. Check bid-ask spreads, average daily volume, and currency exposure. Bullion avoids fund tracking risk but involves storage and dealer premiums. Choose based on your time horizon, costs, and execution needs.
Could prices rebound soon after such a large drop?
Rebounds are possible if forced deleveraging slows and the USD pulls back. Data surprises on growth or inflation, or calmer Fed messaging, can support metals. However, if the dollar and real yields rise further, pressure can persist. Use a plan with clear levels rather than trying to pick exact bottoms.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
