Spot Silver plunged more than 9% on Friday, after climbing to a record high of $121.64/oz. during the prior trading day, amid market speculation that the next Federal Reserve Chair could adopt a more hawkish policy approach.
Still, the white metal was on course for its strongest monthly advance on record, being up over 53% so far in January.
US President Donald Trump said on Thursday that he would announce his pick to replace Fed Chair Jerome Powell on Friday. There has been speculation that it would likely be former Fed Governor Kevin Warsh.
“Warsh has been a long-time critic of ultra-loose monetary policy and is a former Fed Governor so market could be pricing in how his appointment could affect the future policy path,” Maybank analysts wrote in a FX Research & Strategy report.
The US Dollar rebounded from a four-year low, but was still on track for a second consecutive weekly loss. A firmer dollar makes dollar-priced Silver less appealing to international investors holding other currencies. Part of that rebound came after the Federal Reserve’s decision to leave borrowing costs on hold.
Spot Silver was last down 9.88% on the day to trade at $104.00 per troy ounce.
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