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It’s no wonder why precious metals continue to stay so bullish. Trump is making the headlines again to start the new week and in case you missed it:NYT: Federal prosecutors open probe into Fed chair Powell amid renovation scrutinyFed Chair Powell calls out Trump on his witch hunt, part of ongoing threats against the central bankThis just continues the episode from last year as Trump continues to take aim at the Fed independence amid his disdain for Powell. While it isn’t new, it serves as a good reminder of how the situation is playing out. And markets are clearly responding with contempt as evident by the risk selling we’re seeing to start the week now.S&P 500 futures are down 0.6% with Nasdaq futures down 0.9% and Dow futures down 0.5% as we look towards European morning trade today.The Fed will surely continue to do their job regardless of this investigation. However, it’s just unnecessary drama for something that shouldn’t even be an issue. Politics and central bank don’t tend to mix in well together. Just take a look at what’s happening with Japan now as another example.But essentially, Trump’s continued attacks will just keep drawing flak and raises fears about credibility and independence at the Fed moving forward. And that is something that will keep chipping away at confidence in the central bank and the dollar in general.For now, risk trades are taking a step back amid the unprecedented attack on Powell. And it comes at a crucial time for US stocks as well. Earnings season is kicking off this week with the big banks set to report, but also keep an eye out on TSMC earnings. The latter is a bellwether for how chipmakers might fare and so that might be the biggest name to watch this week.Besides that, geopolitical risks are also still not completely out of the picture just yet. Trump continues to raise threats on Greenland and Iran, keeping a more nervous mood on the global stage after the situation in Venezuela.
This article was written by Justin Low at investinglive.com.
💡 DMK Insight
Trump’s renewed scrutiny of Fed Chair Powell could shake up market sentiment significantly. As traders, we need to pay attention to how political narratives influence monetary policy perceptions. With Powell facing a federal probe, uncertainty around interest rates and inflation could spike, making precious metals like gold and silver attractive hedges. If traders start to see a correlation between political instability and economic policy shifts, we might see a surge in demand for these assets. Watch for gold prices to test resistance levels around recent highs, as any negative news could trigger a rush to safe havens. On the flip side, if Powell manages to maintain confidence, we could see a pullback in precious metals as traders shift back to riskier assets. Keep an eye on the upcoming economic indicators and Powell’s statements; they could provide critical insights into market direction. The next few weeks will be telling, especially if the political narrative intensifies.
📮 Takeaway
Monitor gold prices closely; a break above recent highs could signal increased bullish momentum amid political uncertainty surrounding Powell.
