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Gold plunged 5.7% to $5,136 and silver crashed 10.6% to $103.81
on Friday after President Trump officially nominated Kevin Warsh
as Federal Reserve chair, boosting the dollar and triggering profit-taking
after precious metals’ record-breaking rally. Despite the selloff,
gold remains up 17% in January — its strongest monthly gain since 1980.
Swedish Expert Challenges Market Consensus
Eric Strand, a commodities specialist quoted in Swedish financial publication Dagens Industri, believes European investors are misreading Trump’s intentions. “If you’ve listened to Trump, it’s hard to believe he would appoint someone who won’t do what he wants,” Strand told the publication, suggesting the sell-off in precious metals is premature.
The dramatic price declines hit European trading floors hard, with gold and silver futures tumbling as markets anticipated the appointment of Kevin Warsh as the new Fed chair. European-listed precious metals ETFs and mining stocks bore the brunt of the selling pressure, reflecting investor fears that higher interest rates would diminish the appeal of non-yielding assets like gold.
Strand’s contrarian view highlights a disconnect between European market sentiment and the political reality of Trump’s approach to monetary policy. While markets are pricing in a more hawkish Fed under new leadership, the Swedish expert suggests Trump’s historical preference for lower rates could override any independence the new chair might seek.
Regional Investment Impact
European asset managers overseeing billions in precious metals investments now face difficult decisions. Major European gold ETFs, including those listed in London and Frankfurt, experienced significant outflows as institutional investors repositioned their portfolios. The selling pressure extended beyond gold to silver, platinum, and copper, creating broad-based weakness across the commodities complex.
The market reaction reflects European investors’ sensitivity to U.S. monetary policy, given the dollar’s dominant role in commodity pricing. Many European pension funds and sovereign wealth funds had increased their precious metals allocations in recent years as a hedge against currency volatility and geopolitical uncertainty.
What’s Next for European Markets
The divergence between Strand’s analysis and prevailing market sentiment sets up a potential opportunity for contrarian European investors. If the Swedish expert proves correct about Trump’s influence over Fed policy, current precious metals prices could represent attractive entry points for European funds willing to bet against the consensus.
However, European markets remain vulnerable to further volatility as Trump’s Fed nomination becomes official and policy directions clarify. The coming weeks will test whether Strand’s interpretation of Trump’s monetary policy preferences proves more accurate than the hawkish expectations currently driving European precious metals markets lower.
