Last week, the surge above US$5,000 was largely driven by uncertainty over who Donald Trump would appoint as Chairman of the Federal Reserve.
Investors feared he might elect someone who would succumb to political pressure to lower interest rates, potentially weakening the dollar and increasing inflation. Seeking protection from these risks, investors gravitated towards gold.
However, news that Trump may nominate Kevin Wersh, who is seen as a relatively “safe” choice compared to other candidates, changed market sentiment. As a result, gold, silver and platinum prices fell simultaneously.
Despite the price decline, precious metals remain quite expensive compared to the same period last year. Ongoing geopolitical tensions, existing and potential new tariffs, and conflicts around the world are making gold and silver attractive as “safe-haven” assets.