Global financial markets reacted sharply Friday as U.S. President Donald Trump nominated Kevin Warsh to lead the Federal Reserve, causing a significant drop in gold and silver prices. Simultaneously, the United Nations issued a stark warning of an “imminent financial collapse,” attributing the crisis to funding shortfalls directly linked to the Trump administration.
Precious metals, often considered a safe-haven investment during instability, began to fall on reports that Trump intended to nominate Warsh, a former member of the Federal Reserve’s Board of Governors. The decline accelerated after Trump confirmed the nomination, emphasizing that Warsh supports lower interest rates.
Gold lost up to 12 percent of its value during Friday’s trading, falling below $5,000 an ounce after hitting a record high of nearly $5,600 on Thursday. Silver, which had reached a record of over $120 an ounce, plummeted by approximately 30 percent to around $82 an ounce.
“The remarkable choice… might give the market some hope that the Fed’s independence will remain intact,” said Kathleen Brooks, Director of Research at the trading group XTB. The market volatility follows a week in which investors contended with a weakening dollar, Trump’s threats against Iran, renewed talk of tariffs, and the possibility of another U.S. government shutdown.
In a related development highlighting the Trump administration’s impact on international bodies, UN Secretary-General António Guterres warned member states of a dire financial situation. In an email, Guterres urged nations to meet their financial obligations “in full and without delay” to “avoid an imminent financial collapse.”
Guterres noted that the current situation is “radically different” from past financial challenges, pointing to official decisions not to fulfill mandatory contributions that fund a large part of the UN’s regular budget. Since Donald Trump’s return to the White House in early 2025, the United States has reduced its funding to several UN agencies and has refused or delayed certain mandatory payments. The administration also launched an entity called the “Peace Council” on January 22, which critics view as a potential rival to the United Nations.
The UN’s deficit reached $1.6 billion last year, more than double its 2024 shortfall. Guterres fears the organization may be unable to fully implement its 2026 program budget and warned that “the regular budget’s liquidity could run out as early as July.”
