Just last Friday, the gold and silver markets experienced the most brutal 'massacre' since 1980. If you have gold or silver in hand, you might have lost sleep last night as silver plummeted by 31% in one day, and gold recorded the largest single-day drop in history in USD. This kind of volatility, more exaggerated than air coins, why would it happen to the most stable precious metals? The answer seems to point to one name: Kevin Warsh.

Trump has officially nominated him as the next chairman of the Federal Reserve. At this point, you might ask: isn't it just a change of the person in charge? Why would the market react this way? We can imagine the Federal Reserve as a butler helping the host throw a party.

The previous butler, Powell, was more smooth, and everyone felt that even if inflation was high, he would continue to play music and serve free drinks (cut interest rates), so people frantically bought gold as a hedge, betting on 'currency devaluation'.

But Warsh is different. In the previous article, I mentioned that he is known in the circle as a notorious miser. His logic is simple: as long as inflation does not go back to normal, I will cut off the water and electricity (raise interest rates/contract balance sheet). So when everyone realizes that this person who resembles a teaching director is about to walk in, what is the first reaction? It is to withdraw investment.

In the past few months, global funds have poured into gold and silver, engaging in devaluation trades, betting that the dollar will collapse. As a result, the moment he appears, the dollar index skyrockets, recording the largest increase in months. It’s like you bought a bunch of insurance for accidents, only to find that accidents won’t happen at all; thus, the huge premiums you paid (the premium) naturally become a bubble. But what’s even stranger is: if it’s just a change of chairman, why is even industrial copper falling? Is this all just panic from retail investors?

Not really. Behind this is not only the reversal of expectations but also the exhaustion of liquidity. Additionally, the internal 'palace drama' currently unfolding within the Federal Reserve: the current chairman Powell is being investigated by the Justice Department due to old accounts of building renovations, which he claims is political intimidation. Meanwhile, Trump is trying to completely clean out the dovish forces within the Federal Reserve. Does this mean the bull market for precious metals is completely over?

Currently, the market predicts that Warsh will officially take office in June. Before that, gold is still holding at 4700 USD. Do you think a strong dollar era is really coming back? Or is this just a psychological battle by Trump to lower inflation?