Gold and Silver Slump as Fed Chair Bets Unwind the Debasement Trade

The dollar and yields firm as metals, crypto, and Tech wobble.

Key Takeaways

• Fed Chair Risk Repriced: The immediate reaction to the expected nomination of Kevin Warsh as Fed Chair is nudging markets toward a less-dovish read, with the dollar stabilizing and yields firming. The initial market reaction is also mixing with the unwind of leveraged bets on the steep rise in metals. Our view on yields and the Fed policy outlook remains intact.

• Tech Earnings Face Mixed Reaction as AI Skepticism Grows: Strong results are not enough to offset concerns about AI capex payback. The volatility and divergent price actions point to growing fragility from over-investment risk, particularly with stocks priced for perfection.

• Late-Cycle Dynamics in Credit Markets: Credit spreads are tight, and corporate bond issuance is booming. This is a classic late-stage ingredient when optimism is high and financing is readily available, but the private credit ecosystem is showing more visible stress signals tied to cash-flow risks ahead.