The values ​​of silver, gold and platinum collapsed – Experts: The reason is Trump’s actions

Gold is a safe haven used by many investors, where capital is transferred in uncertain times. Pictured is a gold shop in Qionghai, Hainan Province, China. Picture: Meng Zhongde / Zuma

Silvergold and platinum values ​​collapsed on Friday after a long and extraordinary rally.

Silver had fallen more than 30 percent to less than $80 an ounce on Friday, and platinum had fallen more than 19 percent to around $2,100 an ounce.

The price of gold rose to a record high of $5,600 a troy ounce on Thursday before plunging more than 12 percent to below $4,700 a troy ounce on Friday. One troy ounce equals 31.1 grams.

Financial news office Bloomberg’s According to As for gold, it is the biggest intraday drop since the early 1980s, Bloomberg and news agency Reuters say.

The value of silver, on the other hand, is on its way to the biggest daily decline of all time.

Price changes are historically large in the precious metals market.

Nordic strategy Hertta Alavan according to the collapse of the value of silver, gold and platinum is most probably related to the fact that the president of the United States Donald Trump announced earlier on Friday that he would appoint the central bank’s new governor Kevin Warshin.

Warsh was on the board of the central bank in 2006–2011.

According to Alava, the fear that the central bank would lose its independence has now decreased.

In the past, people may have bought precious metals in the event that a director was elected to lead the central bank, whom the market would not trust, says Alava. They could have thought that at that time the dollar would weaken and investors would withdraw their investments.

OP Pohjolan rescuer Lippo Suominen commented on the precious metals market to HS already on Friday afternoon, when prices were rapidly falling but not yet in a crash.

According to him, geopolitics and especially the unpredictability of President Trump are behind the rise in the price of precious metals and the extraordinary price fluctuations.

In addition to the customs crises and the Greenland scandal, the Trump administration has questioned the independence of the US central bank. Current CEO Jerome Powell is even the subject of a criminal investigation. His season ends in the spring.

Uncertainty has been apt to raise the prices of precious metals.

“Investors have to think about where Trump’s actions are leading every day,” Suominen said earlier on Friday.

Before the collapse of precious metal prices was pushed higher by the significantly weaker dollar. For decades, the dollar has been considered the world’s most reliable safe haven.

“When the dollar weakens, investors turn to gold. Gold purchases by central banks have increased considerably, because unfortunately the euro is not yet a viable reserve currency,” Suominen said.

Hertta Alava points out that the value of gold has risen by almost one hundred percent in a year. Despite Friday’s collapse, gold and silver prices are still higher than, for example, a month ago.

Alava believes that the value of precious metals can fall even further and return to its previous level. However, it also depends on world political events. According to him, the central banks of developing countries are still buying gold.

Finnish according to it is interesting that stocks and gold have risen simultaneously for a long time. Traditionally, gold rises when stocks fall – and vice versa.

“It says that there are less safe investment destinations in the world. Investors don’t want to be completely out of stocks, but at the same time they seek safety in gold.”

The strong rise of silver and palladium in recent weeks was partly explained by the rise in the price of gold. Palladium also fell by more than 16 percent on Friday.

“They rise alongside gold. Gold is starting to be so expensive that some investors end up with the second best precious metal,” Suominen estimates.