Jerome Powell got a direct question about the U.S. ‘losing credibility’ and the soaring price of gold and silver. He punted

Core Viewpoint - Fed Chair Jerome Powell's comments on the recent rally in gold and silver have surprised some investors, highlighting the metals' role as safe-haven assets amid political and policy uncertainties [1] Group 1: Market Performance - Gold has increased by 84% year over year, while silver has surged by 245% since late last year, reaching record highs [2] - Gold hit another record high on Wednesday, and silver reached a multiyear high earlier in the week [6] Group 2: Investor Sentiment - There are two distinct narratives regarding the rally: one suggests a loss of confidence in U.S. markets, while the other points to structural issues like fiscal deficits and rising debt [2][4][5] - Powell noted that short-term inflation expectations have decreased significantly, while long-term expectations remain aligned with the Fed's 2% target, indicating that the case for a structural move into gold is not as strong [2][5] Group 3: Economic Implications - The "Sell America" trade reflects a short-term reaction to political shocks and policy uncertainties, linking gold's rise to a temporary loss of confidence in U.S. assets [4] - The "debasement trade" suggests that ongoing fiscal deficits and expansionary policies will erode the dollar's purchasing power, driving investors toward hard assets like gold [5]