The historic collapse in gold and silver prices on Friday sparked a brutal selloff across mining stocks, as markets aggressively unwound one of January's most crowded trades.

As of 2:00 p.m. in New York, silver was down 27% to $84 an ounce, while gold slid 9.5% to $4,861. Both moves marked the worst single-day declines since 1980 for the two metals.

The selloff was just as violent in exchange-traded products tracking precious metals performance.

The brutal collapse reflects a sharp repricing of monetary risk following President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve chair.

Long viewed as a vocal opponent of quantitative easing, Warsh is widely seen as a hawk — meaning he places greater emphasis on controlling inflation than on maximizing employment.

That characterization alone was enough to puncture fears that monetary policy would be subordinated to political pressure – a perception that rapidly dismantled the "debasement trade" that had fueled precious metals' parabolic January rally.

Chart: World’s Biggest Gold ETF Suffers Worst Session On Record As Debasement Trade Unwinds

Mining Stocks Match The Metal Collapse

For miners, the move was particularly punishing.

Many stocks that had ridden gold and silver's near-vertical rally suffered double-digit daily declines as the debasement trade unwound.

Several precious metal miners recorded double-digit losses:

Fears Around Loss Of Fed Independence Suddenly Vanish

According to Robin Brooks, senior fellow at the Brookings Institution, Warsh is "a good pick" for the Fed and is "known as a hawk."

Eric Teal, chief investment officer at Comerica Wealth Management, said Warsh's selection should "calm concern about the erosion of independence of the Federal Reserve."

Jeffrey Roach, chief economist at LPL Financial, highlighted Warsh's recent speech to the IMF as a defining signal.

"I believe this speech defines Warsh as a defender of central bank independence," Roach said, adding that "investors should be thankful."

At the same time, Roach warned that markets could grow uneasy with Warsh's criticism of modern monetary frameworks.

Warsh has described tools such as forward guidance and strict data dependency as "junk food" for policymakers — a stance that could inject new volatility into rate expectations.

Neil Dutta of Renaissance Macro Research confirmed that Warsh "clearly overweights the inflation side of the mandate relative to unemployment," reinforcing the perception that easy money is unlikely to return quickly.

"A shift toward a potentially less autonomous Federal Reserve could bolster growth and employment in the short term," Charlie Ripley, senior investment strategist at Allianz Investment Management, said.

"However, further rate cuts and an expansionary stance beyond what current economic conditions warrant would risk higher inflation," Ripley added.

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