By Demetris Christou, Managing Director – AGD Global
If you’ve been checking your gold and silver trackers this week, you’ve probably seen some numbers that look like typos. They aren’t. We are officially in the middle of a “perfect storm.”
On 28th January, Gold smashed through the $5,500 barrier and Silver screamed towards $120, before the market corrected on the 29th. This isn’t just a regular market rally; we are watching a total reordering of the global financial world. Between warships moving in the Middle East, a massive trade deal that ignores the US Dollar, and a Fed that seems to have given up on fighting the rally—we have a lot to talk about.
The US Fed’s “White Flag”
The Federal Reserve met this week and held rates steady at 3.75%. But it’s what they didn’t say that fueled the fire. Despite inflation staying sticky, Fed Chair Jerome Powell basically shrugged off the Gold surge as a “non-macro signal.”
Why this matters: The market heard that and thought, “The Fed isn’t going to stop this.” Usually, when Gold goes up this fast, the Fed threatens to raise rates to “cool things down.” This time? Silence. Investors are interpreting this as a green light. With two Fed governors already voting for a rate cut, the US Dollar is sinking to a 4-year low, making Gold the only “real money” left in the room.
War Clouds over the Persian Gulf
The biggest “right now” driver for prices is the military escalation with Iran. President Trump confirmed that a “massive armada” (led by the carrier USS Abraham Lincoln) is on station. The talk of acting with “speed and violence” has sent a shockwave through the commodities desk.
- Safe-Haven Demand: When the threat of war hits the news, big money flees stocks and bonds and pours into Gold. We saw a 3% jump in a single day following the President’s Social Media posts.
- The Oil Connection: Crude is hovering near $70. If Iran follows through on threats to close the Strait of Hormuz (where 20% of the world’s oil flows), we aren’t just looking at $5,500 Gold—we are looking at a potential move toward $6,000 almost overnight.
The ‘Mother of All Deals’ vs. The US Dollar
While the warships were moving, a “financial bomb” was dropped in New Delhi. The EU and India just signed a massive Free Trade Agreement—the biggest in history—covering 2 billion people.
The SWIFT Conflict
The real drama isn’t about cars or textiles; it’s about the plumbing of the global banks. The EU and India are openly building a way to trade using Euros and Rupees, bypassing the US-controlled SWIFT system.
- The US Reaction: Treasury Secretary Scott Bessent slammed the deal, calling it “disappointing” and accusing Europe of “funding their own problems” by buying refined Russian oil via India.
- The Retaliation: The US has already slapped 25% tariffs on Indian goods to punish them for the bypass. This trade war is only making the Dollar look weaker and Gold look stronger. When the world’s biggest democracies decide they don’t need the Dollar to trade, Gold becomes the ultimate global currency.
The “Sell America” Trade
Between the potential for a US Government shutdown this weekend and the rising military tensions, we are seeing a massive “Sell America” sentiment. International investors are moving capital out of US Treasuries (which they no longer see as “safe”) and into physical bullion.
Our Advice: Don’t get distracted by the daily zig-zags. The “big picture” is that the world is moving away from the Dollar and toward “Hard Assets.”
Warm regards,
Demetris Christou
Managing Director – AGD Global
Trusted Precious Metals Partner
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