U.S. Treasury Secretary Blames China for Gold Price Volatility
U.S. Treasury Secretary Scott Bissent has attributed recent volatility in gold prices to speculative activities in China, describing these actions as "unregulated" and responsible for the sharp increases in the precious metal's value.
In an interview with Fox News, Bissent stated:
"Gold prices have been disrupted in China, necessitating increased margin requirements. It appears that the rise in gold prices is largely due to speculation."
His comments came in response to inquiries about the record highs in precious metal prices, which have been driven by speculative buying, geopolitical tensions, and concerns regarding the independence of the Federal Reserve, which experienced a sudden decline last week.
These fluctuations have also affected currency markets, with the dollar recording its first weekly gain since early January, while the Dow Jones index surpassed the 50,000-point mark for the first time, reflecting investor optimism about the U.S. economy and corporate earnings.
As the midterm elections approach in November, Bissent viewed the Dow's performance as evidence that the U.S. economy is on track for an upward cycle that will benefit citizens.
Regarding Federal Reserve policy, Bissent indicated that the central bank would proceed cautiously before attempting to reduce its balance sheet, stating:
"I do not expect them to take swift action. They have shifted to a policy of ample liquidity, which necessitates a larger balance sheet, so I think they will likely take their time, requiring at least a year to make a decision."
Bissent also discussed the nomination of Kevin Warsh, President Trump's candidate for the Federal Reserve chair, praising his experience and qualifications:
"He will be very independent, but he will understand that the Federal Reserve is accountable to the American people."
During a Senate hearing, Bissent addressed the possibility of pursuing Warsh if he does not lower interest rates as desired by Trump, asserting that the final decision rests with the president, and adding that Trump's remarks were made in jest, highlighting the president's expectations for Warsh to align with his views on interest rates.
Gold and silver continue to attract global investor attention, as markets closely monitor the actions of the U.S. Federal Reserve and their implications for the economy and financial markets.
