Gold, Silver Cut 'Trump Taco' Rally After Warsh Boosts Dollar, Rate Expectations

GOLD and SILVER PRICES trimmed an overnight rally in London trade Wednesday, recovering from 1-week lows in Dollar terms after President Trump extended Washington's ceasefire with Iran indefinitely but comments from his nominee to lead the Federal Reserve sent the US currency higher with long-term US borrowing costs.

With Trump widely mocked by Western pundits for making another TACO − meaning 'Trump always chickens out' − gold rebounded over $100 per Troy ounce to touch $4771 before dropping back to $4740.

Silver prices leapt twice as fast, rallying 4.2% to $78.67 per ounce before retreating 50 cents.

Ahead of Trump's ceasefire extension and following the Senate confirmation hearing for Fed nominee Kevin Warsh on Tuesday, gold yesterday sank to multi-week lows when priced in 'commodity currencies' the Aussie and Canada Dollars as well as in Swiss Francs, while testing 3-week lows in Euros and UK Pounds.

With the Dollar now losing 1.0% since gold hit its current Iran War low 4 weeks ago yesterday, the precious metal today traded 7.5% higher for US investors but 6.5% higher for non-Dollar Westerners.

That extends the split made since the Dollar began falling as Donald Trump returned to the White House at the start of 2025.

"Tuesday's decline in gold was primarily driven by hawkish signals from Federal Reserve Chair nominee Kevin Warsh," reckons a note from Chinese bank and London bullion clearer ICBC, "who said he made no promises to Trump that he would cut interest rates if confirmed.

"After [Warsh's] comments pushed the US Dollar index and 10-year Treasury yields higher, the prospect of interest rates remaining elevated for longer has continued to cap upside momentum in bullion."

Both the Dollar and benchmark US bond yields held little changed Wednesday after jumping yesterday from near multi-week lows.

But the rebound in gold and silver prices began instantly that Trump announced his 'taco' just as his own deadline for re-starting the conflict arrived, saying on the TruthSocial platform which he owns that "our Military...will...extend the Ceasefire until such time as [Iran's peace] proposal is submitted."

With the US blockade of Iran still in force ahead of possible peace talks in Pakistan, Tehran today said it has seized 2 ships attempting to cross the Strait of Hormuz.

"The Senate should not be aiding and abetting Donald Trump's illegal takeover of the Fed by installing his chosen sock puppet as chair," said Democrat Senator Elizabeth Warren on Tuesday during the Banking, Housing and Urban Affairs Committee's confirmation hearing for Warsh.

Warren then went on in a heated exchange to ask Warsh about self-enrichment, the 2020 election result, and whether he has "the courage or the independence" to set monetary policy without deferring to the President.

With gold and silver trimming their rallies late Wednesday, Brent crude reversed an earlier dip to trade back above $100 per barrel − a 3.5-year high when hit on the US and Israel starting the war with Iran at the end of February − as European stock markets fell but New York's stock market hit a fresh record high on the S&P500 index.