Analysis: "Warsh Shock" to Persist Next Week, Traders Heavily Invested in Precious Metals May Face Difficulties

Odaily reported that Seth R. Freeman, Senior Managing Director at GlassRatner Advisory & Capital Group, pointed out that one of the primary tasks for Warsh, the newly nominated Fed Chair, will be to rebuild global market credibility. This is particularly important against the backdrop of the tense relationship between Trump and Powell over the past few months. Freeman also stated that Warsh is the best candidate, given his long tenure in government. However, the best news is that we no longer have to deal with the uncertainty and market disruptions caused by Trump's constant pressure on the Fed Chair, which is good for everyone. Furthermore, he mentioned that just looking at gold's significant drop and silver's even sharper decline indicates that the market is heading towards a stronger US dollar and a different environment, especially for silver. Given this nomination, it wouldn't be surprising if metal prices don't see a substantial rebound. Moreover, considering Warsh's hawkish tendencies, traders heavily invested in precious metals may face losses, particularly those with unhedged or long positions. Some traders could find themselves in serious trouble by next Monday, at least those not holding neutral positions or shorting precious metals. (Jin10)