Precious Metals Market Plunges: Fed Nomination and China Interventions Spark Massive Sell-Off

Dear Valued Customers and Readers,

If you’ve been following the precious metals market like we have here in Reno, today felt like a seismic shift after weeks of unrelenting upward momentum. What started as another day in the “supercycle” turned into one of the sharpest corrections in recent memory, with gold and silver prices tumbling dramatically. As a local dealer navigating these waters, I wanted to break down exactly what happened today—January 30, 2026—and how it ties into the broader chaos we’ve been discussing. No speculation on tomorrow; just the facts from the trenches.

The Fed Chair Announcement: A Hawkish Surprise

The day kicked off with President Trump’s nomination of Kevin Warsh as the next Federal Reserve Chair, set to replace Jerome Powell when his term ends in May. Warsh, a former Fed Governor during the 2008 financial crisis and a Morgan Stanley veteran, is known for his inflation-fighting stance and hawkish views on monetary policy. This pick came amid Trump’s ongoing criticisms of the Fed, including legal probes into its independence and calls for lower interest rates.

Markets reacted swiftly: The U.S. dollar surged about 2-3%, as investors saw Warsh’s nomination as a stabilizing force that could preserve some Fed autonomy. A stronger dollar typically pressures dollar-denominated commodities like precious metals, making them more expensive for international buyers and prompting a wave of selling. This news effectively undercut the “debasement trade” narrative that had driven much of the recent rally—fears of currency weakening and unchecked inflation seemed less immediate with a potential hawk at the helm.

Price Carnage Across the Board

The fallout was brutal and immediate:

• Gold: Futures plummeted 9-11%, closing around $4,980 per ounce. Spot prices dipped to between $4,812 and $5,139, erasing a chunk of January’s 28% gains and pulling back from intraday highs near $5,500 earlier in the week.
• Silver: The real bloodbath—futures crashed 30-31%, settling at $78-80 per ounce. This marks silver’s worst single-day drop since the infamous “Silver Thursday” in March 1980, when the Hunt brothers’ cornering attempt collapsed. Spot silver hit lows around $80 after briefly surpassing $120 just yesterday, wiping out much of its 60-72% monthly surge.

Other metals weren’t spared: Platinum and palladium saw double-digit declines, while copper—a bellwether for industrial demand—also retreated. Trading volumes spiked, with thin liquidity amplifying the moves as momentum traders who piled in during the rally rushed for the exits. This wasn’t isolated; broader markets felt the ripple, with equities mixed but risk assets like crypto echoing the downturn.

China’s Hand in the Hammering

Adding fuel to the fire, China intervened decisively in its domestic markets. Authorities halted trading in several silver and oil exchange-traded funds (ETFs) for hours due to extreme premiums—up to 36% over their net asset values—driven by retail investor frenzy. This follows China’s January 1 export restrictions on silver, limiting shipments to just 44 licensed companies for 2026-2027 to prioritize domestic needs in solar panels, electric vehicles, and AI tech.

While not a direct global price suppression, these moves curbed speculative bubbles in Asia, where much of the rally’s demand originated. By pausing overheated funds, China aimed to protect investors and stabilize flows, but it signaled to the world that the hype might have gone too far. Combined with the Fed news, it triggered a chain reaction: Reduced Asian buying pressure led to cascading sells on Western exchanges like COMEX and LBMA, where inventories were already strained.

What This Means for Us in Reno

Here at our shop, we’ve been fielding calls all day from customers watching their holdings swing wildly. As someone who’s paused scrap buys amid these bottlenecks (as shared in our previous update), today’s events underscore the volatility we’re dealing with. Refiners and vaults, already overwhelmed, might see some short-term relief from the sell-off, but the underlying supply shortages haven’t vanished overnight.

If you’re holding physical gold or silver, remember: These are long-term hedges, not day-trading plays. Today’s drop doesn’t erase the year’s gains—gold is still up 70-90% annually, silver 150-280%—but it reminds us why diversification and patience are key.

We’ll keep monitoring and updating as things evolve. If you have questions or need advice on navigating this, drop by or give us a call. Stay informed, stay steady.