Political developments in the United States once again sent shockwaves through the precious-metals market. After Donald Trump hinted that he has chosen Kevin Hassett as the next Federal Reserve Chair, investors quickly shifted their positions.
The US Dollar weakened, demand for safe-haven assets climbed, and both gold prices and silver prices surged to new highs. Here’s a clearer and more digestible breakdown of what happened.
Trump Signals His Pick for the Fed
Markets moved rapidly after Donald Trump told reporters, “I know who I’m going to pick,” while flying aboard Air Force One. Although he didn’t say the name outright, previous reports strongly suggested Kevin Hassett, the Director of the National Economic Council, as the top contender to replace Jerome Powell next year.
Hassett mentioned that Americans could expect lower interest rates, meaning cheaper car loans and more accessible mortgage rates. This statement was widely interpreted as dovish, signaling the likelihood of rate cuts.
As soon as this signal reached investors, the Dollar weakened. A weaker Dollar typically boosts demand for safe-haven assets. This helped push gold prices higher almost instantly. The same market sentiment also supported silver prices, which rely not only on investment demand but also on growing industrial use.
Gold Prices Jump and Silver Prices Hit All-Time Highs
Both gold and silver surged, but silver made the biggest headlines. On Monday, gold prices climbed about 1.2% to reach $4,262 per troy ounce. Although this was still slightly below the mid-October peak, the rise contributed to gold’s impressive year-to-date performance, which has now exceeded 60%.
This upward movement didn’t start overnight. The previous Friday, gold prices had already strengthened when the Comex futures market experienced a technical outage, leading to heightened trading activity once the system recovered.
Also read: Gold Price Today per Ounce: Updated from 3 Southeast Asian Gold Market Indonesia, Malaysia, Thailand
Meanwhile, silver prices delivered an even more dramatic rally. Silver increased 2.5% to $57.85 per ounce, marking two consecutive sessions of all-time highs.
This followed a strong 5.5% jump in the prior session. Altogether, silver prices have soared 86.5% so far this year, the strongest growth in more than four decades.
Why are silver prices rising faster than gold?
Because more than half of silver’s demand comes from industrial sectors such as solar panels, electronics, and automotive components. During times of economic uncertainty, silver benefits from both industrial demand and investor demand, giving it a double advantage.
Platinum and Palladium Follow the Rally
Beyond the surge in gold prices and silver prices, other precious metals also posted strong gains.
- Platinum rose 3.7% to $1,727 per ounce, hitting a six-week high. Its year-to-date gain is nearing 80%.
- Palladium climbed 4.1% to $1,513 per ounce, now up nearly 60% this year.
These metals are heavily used in automotive catalytic converters for fossil-fuel and hybrid vehicles. With supply tightness and steady demand, their prices have benefited from the same market momentum lifting gold prices and silver prices.
According to Saxo Bank’s commodity strategy team, the rally across precious metals is being driven by:
- Expectations of Fed rate cuts,
- Concerns over currency debasement,
- Rising fiscal-debt anxiety, and
- Persistent inflation in everyday living costs.
Each of these factors pushes investors toward hard assets, strengthening both gold prices and silver prices.
Also read: Gold Prices Strengthen While Silver and Copper Rally on Improving Fed Signals
The Dollar Falls, and Precious Metals Rise Globally
What’s notable is that rising gold prices and silver prices are not limited to US Dollar terms. As the Dollar weakened, other currencies, including the Japanese Yen, strengthened. Yet, despite a stronger Yen, gold still hit a new record in Japan, reaching ¥21,291 per gram.
The powerful rally in silver prices also pushed the Gold/Silver Ratio down to just above 74, its lowest level in 18 months. This indicates that silver has been outperforming gold at a significant pace.
The political shift in Washington shows just how sensitive the precious-metals market is to expectations regarding monetary policy. Trump’s signal of a potentially more dovish Fed fueled a decline in the Dollar, instantly pushing gold prices and silver prices higher.
With continued expectations of rate cuts, inflation pressures, and strong industrial demand, analysts believe the upward trend for both gold prices and silver prices may continue in the coming months.
