Forex News
In an interview with the Wall Street Journal, the US President Donald Trump revealed that he is leaning on former Fed Governor Kevin Warsh and also on the National Economic Council Director Kevin Hassett to lead the Federal Reserve since May 2026.
When asked if Kevin Warsh was at the top of the list Trump said “Yes, I think he is. I think you have Kevin and Kevin. They’re both—I think the two Kevins are great,” he said. “I think there are a couple of other people that are great.”
The article mentioned that Warsh was grilled over a 45 minute meeting on Wednesday at the White House in which Trump pressed Warsh on whether he could trust him to support lower interest rates.
Trump said that he though the next Fed Chair should consult with him on where to set interest rates.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
- Silver drops 2.75% to $61.84 after printing a fresh all-time high at $64.65.
- Bearish engulfing pattern and RSI negative divergence warn of a near-term retracement risk.
- Key support sits at $61.00, then $60.09 and $59.33; resistance reappears near $62.00.
Silver prices plunges after hitting an all-time high (ATH) of $64.65 losses 2.75% as investors book profits ahead of the weekend, as Federal Reserve officials remain divided about future monetary policy meetings. At the time of writing, XAG/USD trades at $61.84.
XAG/USD Price Forecast: Technical outlook
The grey metal remains upward biased but in the short-term could be headed for a retracement. Price action shows the formation of a ‘bearish engulfing’ candle chart pattern, an indication that sellers outweigh buyers. Nevertheless, there are signs of a potential negative divergence as the Relative Strength Index (RSI) it reaches a lower peak while the non-yielding metal registers a higher high. Therefore, further downside looms.
Silver’s first support s $61.00. A breach of the latter will expose the December 10 daily low of $60.09, $60.00 ahead of challenging December’s 5 high turned support at $59.33.
Conversely, if XAG/USD rises past $62.00, expect another leg-up with the next resistance levels being the December 11 peak of $64.30 ahead of the record high of $64.65.
XAG/USD Price Chart – Daily
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- XAU/USD retreats from a seven-week $4,353 peak as traders lock in profits after a strong weekly rally.
- Fed officials warn inflation remains elevated, with scarce CPI data complicating policy signals amid shutdown distortions.
- Stalled Russia–Ukraine peace talks and softer US labor data continue to underpin Gold’s medium-term
Gold (XAU/USD) advances modestly on Friday as traders seem to book profits ahead of the weekend, yet clings to gains of over 0.51% after reaching a seven-week high of $4,353. At the time of writing, XAU/USD trades at $4,302 as traders digest comments from Federal Reserve (Fed) officials.
Bullion trims gains ahead of the weekend, but remains supported by Fed uncertainty, weak data
The US economic docket was light, yet Federal Reserve officials crossed the wires. Two of the three dissenters expressed concerns about inflation remaining too high, specifically amid a period of scarce economic data, particularly the Consumer Price Index (CPI), which would indicate the pace of price increases.
Last Thursday, a weaker-than-expected jobless claims report justified the central bank’s decision as the number of Americans filing for unemployment benefits rose. However, as the Fed Chair Jerome Powell stated, most data could be “distorted” due to the US government closure.
In the meantime, Russia-Ukraine peace talks seem to have stalled. The White House press secretary expressed that US President Trump is frustrated with the pace of talks and disappointed with Ukraine’s President Volodymyr Zelenskiy, who has not signed off on the peace plan made by the US.
Daily digest market movers: Gold advances as the Greenback remains pressured
- Bullion mostly ignored Fed officials’ comments, which so far are setting the stage for interest rates next year. Kansas City Fed Jeffrey Schmid dissented because inflation is “too hot” and feels that monetary policy should remain modestly restrictive. He added that “Right now, I see an economy that is showing momentum and inflation that is too hot, suggesting that policy is not overly restrictive.”
- The other dissenter voting for a hold was Chicago Fed President Austan Goolsbee, who said that it was better to wait for more data, particularly about inflation and the job market. Despite this, he said that he was “not hawkish on rates for next year,” and projects 50 bps of easing if the economy evolves as he expects.
- Philadelphia Fed President Anna Paulson said she remained worried about job market weakness. She added, “That's partly because I see a decent chance that inflation will come down as we go through next year with the waning of tariff impacts, which have been the main driver of price pressures overshooting the target this year.”
- Cleveland Fed Beth Hammack remains focused on high inflation and said she would prefer monetary policy to be tighter. She sees the current policy rate as “right around a neutral” level, though she added that she would prefer a more restrictive stance to exert further pressure on inflation.
- US Initial Jobless Claims for the week ending December 6 rose to 236K, up sharply from the prior week’s upwardly revised 192K, according to the Department of Labor. In contrast, Continuing Claims for the week ending November 29 fell to 1.838 million from 1.937 million, suggesting some stabilization in longer-term unemployment.
- US Treasury yields are rising, with the 10-year benchmark note rate up four basis points at 4.19%. US real yields, which correlate inversely with Gold prices, fall nearly two and a half basis points to 1.872%, a tailwind for Bullion.
- The US Dollar Index (DXY), which tracks the Greenbacks’ performance against a basket of six peers, is flat at 98.35.
Technical Analysis: Gold’s uptrend intact as bulls take a breather
Gold is upward biased, even though it hovers above/beyond the $4,300 mark, with bulls remaining in charge as depicted by the Relative Strength Index (RSI). The RSI is bullish and as it enters overbought territory, it hints that buying pressure is strong.
If XAU/USD climbs above the current day's high of $4,353, this opens the door to test the all-time high at $4,381. Once surpassed, the next stop would be $4,400, $4,450 and $4,500. Conversely, if Gold prices tumble below the December 11 high of $4,285, look for further downside to $4,250 ahead of $4,200.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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