Last Friday, gold and silver experienced an epic crash, marking the largest single-day drop in forty years. The New York Stock Exchange gold plummeted from a historical high of $5,626 to a low of $4,700; silver was even more volatile, with an intraday fluctuation of up to 38%, dropping from a peak of $121 to $74, before closing back at $82.
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Figure: Gold and silver crash
That evening, Trump confirmed via a post the nomination of former Federal Reserve Governor and Estee Lauder family son-in-law Kevin Warsh as the new Federal Reserve Chairman. Due to his previous opposition to quantitative easing, he is seen as a representative of the hawkish stance, and the market attributed this round of plummet to his nomination.
<h2>I. What kind of Federal Reserve Chairman will Warsh be?</h2>
At 56 years old, Warsh is a typical Jewish elite straddling politics and business. He earned his Juris Doctor degree from Harvard University and, like Powell, is an &#34;old master&#34; wearing an economics hat. He entered Wall Street in 1995 and was recommended by George W. Bush in 2006 as the youngest Federal Reserve Governor. He stabilized the market during the financial crisis but later left due to his opposition to excessive QE.
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Figure: Kevin Warsh
The most striking label on him is that he married Jane Lauder from the Estee Lauder family, and his father-in-law Ronald Lauder has maintained a good personal relationship with Trump. During Trump's first term, he considered nominating Warsh as chairman but ultimately chose the &#34;more compliant&#34; Powell; this nomination may carry a hint of making up for past regrets.
Historically, Warsh's stance has indeed been hawkish, focusing more on inflation risks and clearly opposing unlimited quantitative easing. However, during this year's chairman race, his rhetoric turned dovish, suggesting that tariffs do not necessarily lead to inflation and that productivity brought by AI can sustain growth amid low inflation, supporting interest rate cuts.
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Figure: The probability of interest rate cuts this year remains at 2 times
However, I believe that rather than simply debating hawkish or dovish tendencies, more attention should be paid to Warsh's professional characteristics. He opposes the &#34;data-dependent&#34; decision-making that follows blindly and instead advocates for formulating medium- to long-term monetary policy guidelines based on the judgment of cycles. Overemphasizing single-month data may lead to policy lag risks and increase meeting uncertainties.
Most importantly, Warsh is a staunch supporter of Federal Reserve independence, opposing the Fed becoming a subsidiary of the Treasury. This is beneficial for maintaining the credibility of the dollar and weakening the process of de-dollarization.
<h2>II. The Collapse of Gold and Silver Marks the End of Speculative Frenzy</h2>
Nominating Waller clearly cannot be the scapegoat for the collapse of gold and silver. Firstly, since January, Hassert has declined, and Waller has been the hottest candidate for the Federal Reserve Chair. On betting websites, Waller's chances reached 80% before Friday, and the market has already priced this in.
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Figure: Winning Odds on Betting Websites
Secondly, Waller's nomination did not trigger hawkish panic. This is reflected in the one-year SOFR swap rate, which actually fell by 3 basis points to 3.47% in the evening, and long-term U.S. Treasury yields also retreated.
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Figure: U.S. Dollar Interest Rates Decline Instead of Rising
The sharp collapse of gold and silver essentially turns safe-haven assets into a risky asset game over. This year, the volatility of precious metals has soared, losing their safe-haven attributes and instead becoming a speculative barometer. The accumulated loose chips are excessive, making the bulls very fragile. Waller's nomination validates the illusion of de-dollarization and gives the bulls a reason to exit.
<h2>III. Summary</h2>
(1) Trump’s nomination of Waller as the next Federal Reserve Chair is highly likely to take office in May. Compared to his hawkish background, more attention should be paid to his professional characteristics of insisting on Fed independence, opposing MMT debt expansion, and forward-looking decision-making.
(2) The collapse of gold and silver marks the end of a frenzy, behind which are countless speculators facing liquidation. Waller's nomination merely took on this scapegoat responsibility at the right time.
Risk Warning and Disclaimer
The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not consider individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at their own risk.

Last Friday, gold and silver experienced a historic plunge, marking the largest single-day drop in forty years. The price of gold fell from $5,626 to $4,700, while silver dropped from $121 to $74, closing at $82. The market attributed the crash to Trump's nomination of Kevin Warsh as the new Federal Reserve Chairman. Warsh is known for his hawkish stance and opposition to quantitative easing, but his rhetoric shifted to a dovish tone during the campaign, supporting interest rate cuts. He advocates for the formulation of medium- to long-term monetary policy, emphasizing the independence of the Federal Reserve

- Last Friday, gold and silver experienced a historic crash, marking the largest single-day decline in 40 years, with gold plummeting from $ 5626 to a low of $ 4700, while silver saw a 38% intra-day swing.  
- The crash is linked to the nomination of Kevin Warsh, a known hawk and former Fed governor, by Trump as the new Fed chairman, although the market had anticipated this nomination prior to the event.  
- Warsh is viewed as an advocate for Fed independence and long-term monetary policy, while the crash reflects the end of speculative excess in precious metals, with many investors facing significant losses.

Historic plunge in gold and silver, Waller is not the scapegoat