"The two precious metals, the most classic of the "safe-haven" assets, have the tangibility and inherent scarcity to act a hedge in moments of turmoil, particularly when investors worry that politics or policy could undermine the value of the dollar or U.S. government bonds. That is why the metals' relentless rally to record highs since late last year-Gold is up 84% year-over-year and silver up a whopping 245% - has drawn attention from analysts."
""The argument can be made that we're losing credibility or something," Powell acknowledged before insisting that's "simply not the case." Just look at where inflation expectations are, he pointed out: "our credibility is right where it needs to be." If investors believed inflation would remain persistently above the Fed's 2% target, the case for a structural move into gold would be stronger. Instead, Powell noted that short-term inflation expectations have "come way down," while longer-term measures remain consistent with 2% inflation."
The two precious metals offer tangibility and scarcity that can hedge against turmoil when investors fear politics or policy might undermine the dollar or U.S. government bonds. The metals have rallied to record highs since late last year, with gold up 84% year-over-year and silver up 245%. Analysts split the move into two narratives. One is a short-term, event-driven "Sell America" trade, where investors rotate out of U.S. assets after political shocks, policy uncertainty, or sudden changes in trade or fiscal outlooks. The other is a more structural narrative linked to debasement concerns.
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