The appointment of the Federal Reserve Chair, silver and gold market values evaporated, another Trump's stock market manipulation?
The appointment of the new Federal Reserve Chair has cooled down the hot investment in gold and silver.
On Friday local time, Trump officially announced his nomination of Kevin Warsh as the next Federal Reserve Chair. As soon as the news came out, the dollar quickly strengthened, while the precious metals market was "bloodbathed," with gold and silver plummeting instantly.
US media pointed out that compared to economic growth, Warsh is more concerned about high inflation. In other words, he may not follow Trump's request to cut interest rates, which has enhanced market confidence in the dollar.
Regarding the impact of the Federal Reserve's interest rate cuts on the price of precious metals, it can be simply understood as: a rate cut means a decrease in the real interest rate of the dollar, which also reduces its investment appeal. As a result, the investment appeal of gold as a safe-haven asset will increase.
Trump's nomination of Warsh eased the market's anxiety about the Federal Reserve's rate cuts, so the prices of gold and silver naturally fell. Of course, there are many factors that affect the trend of precious metal prices, and the Federal Reserve's monetary policy is just one of them.
For ordinary retail investors, buying a few grams of gold in their account might lose hundreds of dollars overnight, but if we expand the scope to the entire gold and silver market, this sharp correction directly caused the market value of gold and silver to fall by $7.4 trillion.
What does this mean? In 2025, the combined GDP of France and the UK is only $7.32 trillion, which is equivalent to the total GDP of two major European powers. Hence, the investment market uses the term "bloodbath" to describe this situation.
But then again, many people buy precious metals not for speculation, but as a hedge against risk. After all, the United States itself is one of the biggest unstable factors in the world, and Trump is leading the stock market investment. Therefore, the market's confidence in gold and silver is unlikely to collapse because of this crash.
But still, we would like to advise you, invest with caution, don't get caught up in the "shearing" of others.
Federal Reserve Chair Nomination
Original: toutiao.com/article/1855801484584972/
Statement: This article represents the views of the author.