Gold plunges as US dollar jumps on reports Kevin Warsh is Trump’s Fed pick
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Spot gold lost 3.9 per cent to US$5,183.21 per ounce, as at 3.23am GMT, after falling as much as 5 per cent earlier.
PHOTO: BLOOMBERG
SINGAPORE – Gold tumbled and stocks slumped while the US dollar shot up on Jan 30 after US President Donald Trump said he has firmed his choice for new Federal Reserve boss, with reports zeroing in on Kevin Warsh
Spot gold lost 3.9 per cent to US$5,183.21 per ounce, as at 3.23am GMT, after falling as much as 5 per cent earlier, interrupting a record-breaking rally in January. A gauge of the dollar rose as much as 0.5 per cent, making precious metals more expensive for most buyers.
Mr Trump is expected to name Mr Warsh as his nominee for Fed chair, Bloomberg News reported. Mr Warsh, a former Fed governor, has a longstanding reputation as an inflation hawk, but has aligned himself with the President in recent months by arguing publicly for lower interest rates. Mr Trump said he would announce his nominee on Jan 30 morning US time.
“While reports of Mr Warsh’s nomination were a trigger, a correction was overdue,” said OCBC strategist Christopher Wong. “It’s like one of those excuses markets are waiting for to unwind those parabolic moves,” he said.
Gold hit a record high of US$5,594.82 on Jan 29, with prices having soared more than 20 per cent so far in January.
MSCI’s broadest index of Asia-Pacific shares outside Japan tumbled as much as 1.3 per cent, extending the previous day’s declines with the biggest one-day slump of the past month. Singapore’s Straits Times Index was down 0.2 per cent at the midday trading break.
S&P 500 futures slid 0.4 per cent, Nasdaq were off 0.5 per cent after Reuters reported Mr Warsh visited the White House for a meeting with Mr Trump on Jan 29, citing a source familiar with the matter.
On prediction market site Polymarket, the implied probability of contracts betting that Mr Trump will nominate Mr Warsh to lead the central bank surged to 92 per cent from 35 per cent.
Spot silver slipped 5.7 per cent to US$109.55 an ounce, after hitting a record high of US$121.64 on Jan 29. The metal has surged 56 per cent so far in January, on track for its best-ever monthly performance.
Spot platinum lost 5.3 per cent to US$2,489.31 per ounce after hitting an all-time high of US$2,918.80 on Jan 26, while palladium rose 5.8 per cent to US$1,890.25. REUTERS
