Market Reaction to Fed Nomination
Susannah Streeter from Wealth Club noted that the recent sell-off in metals was driven by relief that a “Trump cheerleader” would not lead the Federal Reserve.
She emphasized that Kevin Warsh, who has been chosen as the next Fed chair, brings substantial experience and is not expected to be easily influenced. This leads to a notable shift away from safe-haven assets.
Michael Brown, a strategist at Pepperstone, characterized the market’s downturn as a “meltdown in the metals space.” Additionally, industrial metals like platinum and copper declined. Bitcoin managed a slight recovery, rising 1.8% against the US dollar, but it remains well below its previous highs.
Oil Prices Decline Amid Shifting Market Trends
Oil prices experienced a 4% decline as investors noted a reduction in geopolitical tensions between the US and Iran, with Brent crude now trading around $65.24 a barrel, down from last week’s high of about $71. In contrast, the US stock market opened on a positive note, with the S&P 500 index rising by 0.4% against several rival currencies.
Market Dynamics and Predictions
The dollar, which had weakened in late January, gained 0.43% against a range of other currencies. Despite the recent downturn in gold and silver prices, analysts at Deutsche Bank maintain their forecast of gold reaching $6,000 this year. Mohit Kumar from Jefferies described the sell-off as an “unwind” of a “crowded” trade, indicating a shift in market positioning.
