Gold and silver fell by 7 percent and 11 percent respectively on the first trading day of the week, and the decline is still ongoing. The price drop began after the unveiling of the new Federal Reserve chair. Mr. Kevin Warsh, who is often associated with hawkish monetary policy views, surprised markets. Morgan Stanley strategists also argue that despite policies aimed at weakening the dollar to support industrial competitiveness, the recent pace of dollar movement has likely been undesirable for the government.

Trump, in an unexpected move, introduced the most hawkish candidate for the Federal Reserve chairmanship. From the market’s perspective, this was not in line with Trump’s pressure to lower interest rates and caused a sharp decline in gold and precious metals. Warsh, who took office with the promise of a "regime change" in monetary policy and reducing the Fed’s balance sheet, claims that the productivity boom driven by artificial intelligence will curb inflation, but interest rate cuts are likely to be gradual.

The minutes of the Bank of Japan indicate that the central bank has become more sensitive to the urgency of raising interest rates. These concerns are mainly driven by the weakening of the yen and its impact on inflation. Recent movements in the yen have challenged the downward trend in inflation, and one member emphasized that given the immediate priority of price stability, the bank should not spend too much time assessing the effects of rate hikes and should take the next step, a rate increase, without losing the appropriate timing. As a result, markets see a higher probability of an interest rate hike in April.

The Reserve Bank of Australia is likely to approve an interest rate hike to 3.85 percent this week, moving against the global trend. This shift in stance comes in response to stubborn inflation, an unexpected decline in the unemployment rate, and rising housing prices. This would be the first rate increase since November 2023. Stephen Miller, an investment strategist at GSFM, said, “Inflation is a clear risk, and addressing this risk now through an interest rate increase may be the most appropriate response. Failing to do so could require more aggressive use of interest rate tools in the future.” The final decision will be announced on Tuesday.