Gold and Silver Swing Ahead of Fed Change

Gold and silver prices swung violently overnight, underscoring just how fragile market sentiment has become amid Iran tensions and renewed speculation around global monetary policy. After an extraordinary rally that pushed both metals to levels few would have considered plausible, sharp reversals emerged into the afternoon session. Gold briefly shed around 4% from its highs before finding solid bid support. Silver’s move was even more pronounced, giving back roughly 6% of earlier gains. Crypto and equities were also hit, though with little in the way of a visible recovery so far.

Safe-haven demand has been the dominant backdrop, driving gold and silver into historic territory earlier this month. Gold futures surged to record highs north of US$5,000 per ounce, fuelled by geopolitical risk, concerns over Federal Reserve independence and a steadily weakening US dollar. That narrative intensified further after Donald Trump told media he was unconcerned about the dollar losing value, effectively dismissing the issue. Silver, which pushed decisively into triple-digit territory and outpaced gold in percentage terms, benefited from its dual role as both an industrial metal and a store of value.

Trump has since reiterated that a decision on the next Fed chair could arrive as soon as next week, prolonging a process that has dragged on for months and injected an unusual level of political uncertainty into markets. There is, however, no guarantee another delay won’t occur. What is not in dispute is the administration’s strong preference for a more dovish policy stance—one that could further amplify the so-called debasement trade while continuing to inflate equity markets, a key barometer of success for Trump.

If Trump ultimately gets his way, what many see as the tail end of several liquidity and economic cycles may yet experience a final surge. From a fundamentals perspective, the more logical framing for metals is not that they are rising, but that currencies are falling. A decisive shift toward aggressively dovish policy from the world’s largest economy would have clear and far-reaching implications for precious metals prices.