Gold and Silver Climb Amid Volatile Trading Week

 

Gold and Silver Climb Amid Volatile Trading Week

(Bullion News Network) – Gold and silver prices increased on Friday, recouping some losses in both markets after a Thursday drop. The spot price of gold increased by more than $120 per troy ounce, crossing $5,050/ozt and nearing Wednesday’s weekly peak of $5,084.25 per troy ounce. Silver’s spot price failed to come close to recovering Wednesday’s weekly high of $84.31/ozt but executed a strong performance to end the week. Silver gained nearly $2.40/ozt on Friday, crossing $77.75. The price action marginally favored silver, driving the gold-silver ratio less than half a point lower to approximately 65:1. Friday’s price action concluded a week of volatile trading in the precious metals market driven by a range of geopolitical and economic signals.

U.S. employment and inflation data drove market rate cut expectations sharply lower to end the week. On Wednesday, the U.S. employment report found 130,000 jobs were created in January, much higher than the median projection of just 55,000. The U.S. unemployment rate also dropped, declining from 4.4% to 4.3%. On Friday, the Consumer Price Index (CPI) saw inflation cool in January, falling to 0.2% against a median projection of 0.3%. The CPI is one of the Federal Reserve’s main measures of inflation, and cooling inflation numbers could play a major role in how the FOMC votes when it meets again in March. 

Market confidence in a March interest rate cut dropped sharply after both of these favorable economic reports. At the end of the trading day on Friday, CME FedWatch projected the probability that the FOMC will cut rates in March at just 9.8%, down from 18.4% last week and 27.1% one month ago. The retreat in rate cut expectations correlates strongly with recent evidence that the U.S. economy may be moving in a more favorable direction. The FOMC cut interest rates three times at the end of 2025 as a response to the cooling American labor market, and Fed officials throughout 2026 have struck a public tone of cautiousness, especially as inflation persists. While a reduction in the CPI may give the FOMC more confidence in executing a rate cut, the warming U.S. employment situation seems to bolster the “wait and see” approach that the Fed adopted to begin the year.

Kevin Warsh’s Fed Chair nomination continues to be a major story, especially for safe haven asset markets. Warsh was nominated to succeed Jerome Powell as chair of the Federal Reserve last month, but he faces a difficult path to confirmation in the Senate. In January, Republican Senator Thom Tillis vowed to block any Fed Chair nomination until the investigation into Jerome Powell, which began in January, was fully and transparently concluded. Tillis once again doubled down on the promise this week during a forthcoming interview with journalist Margaret Brennan.

The decision I get to make is whether or not I allow a markup, and if I do allow a markup, how I vote. And I’m saying that until the [investigation] is resolved, I’m a no.

Precious metal prices crashed on Jan. 30, shortly after Trump announced Warsh’s nomination. Warsh served on the Federal Reserve’s Board of Governors during and following the 2008 financial crisis, and the economist holds a reputation as an ally to Wall Street. More importantly, Warsh tends to oppose large asset acquisitions by the Federal Reserve, a position that could mitigate inflation if he is confirmed to the central bank’s highest post. Warsh’s confirmation is far from guaranteed, though. Tillis is a member of the Senate Banking Committee, which currently holds a GOP majority of 13-11. If Tillis follows through on his promise to block the nomination and no Democratic senators flip, Warsh’s nomination would fail to escape committee to make a larger vote on the Senate floor.

The drama surrounding Warsh’s Fed Chair nomination will be a major stressor for investors to watch heading into mid-February. Powell’s term as Federal Reserve Chair will end in May, at which point Trump’s nominee would normally fill the position. Throughout 2025, Trump repeatedly bashed Powell on social media for refusing to lower interest rates, a move that some analysts considered an assault on the longstanding independence of the Federal Reserve. In January, the Department of Justice issued a controversial subpoena to Powell and the Federal Reserve. The subpoena related to ongoing accusations that Powell misrepresented the climbing costs of renovations to the central bank’s headquarters in Washington, D.C. The Trump administration claimed to have no knowledge of the investigation. In a statement following the subpoena news, Powell argued that the investigation was part of a larger pressure campaign intended to force the FOMC to cut interest rates, a repeated request of President Trump.

This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.

Safe haven assets, including gold and silver, have historically tended to move considerably in correlation with interest rate cut speculation. Cutting interest rates is generally considered inflationary, so inflation-resistant assets like gold and silver often gain value as interest rates fall. Although likely only one of many factors, controversy surrounding Powell, Warsh, Trump, and the entire Federal Reserve may be responsible for some of the heightened volatility that has characterized the precious metals market so far in 2026.

Gold and silver will both end this volatile trading week down from the Wednesday price peak but up on the day.