Analysts: Gold and Silver Hit by "Warsh Shock," Profit-Taking and Hedging May Have Fueled This Sell-Off

Odaily News The sharp decline in gold and silver this Friday began with reports that Trump would nominate Warsh as the new Federal Reserve Chair. Dirk Malak, Managing Director at SLC Management, stated that Warsh's track record carries a hawkish tone, which reduces the risk of a broad-based depreciation of the US dollar. The market is returning to an orderly monetary policy path. Additionally, analysts mentioned that traders engaging in rapid profit-taking at month-end, or banks conducting hedging operations to guard against sudden declines, may have also contributed to this precious metals sell-off. Adrian Ash, Head of Research at BullionVault, said he has been involved in the precious metals market for 20 years and has never seen a situation like the current one. However, he downplayed the possibility of retail investors suddenly withdrawing funds on Friday and pointed to similar anomalous movements in base metal markets like copper, for example, copper futures fell 4.5% on Friday. Ash also stated that looking only at gold and silver, it's easy to say this is retail frenzy, but the base metals market has no retail participation. (Jin10)