Bitcoin reclaimed $60,000 and precious metals surged after Federal Reserve Chair Kevin Warsh signaled that inflation risks had eased.
Warsh struck an open-minded tone on artificial intelligence during his remarks, reviving appetite for risk assets and precious metals among traders.
The Fed chair made his comments at the ECB Forum on Central Banking in Sintra, Portugal, marking his first international appearance in the role.
Traders judged his overall tone as less hawkish than his June debut, prompting a swift repricing across multiple asset classes.
When asked directly whether the AI spending boom would prove inflationary, Warsh offered a notably noncommittal answer to the audience gathered in Sintra.
“I’m not going to make a judgment now,” Warsh said, a response that traders interpreted as a signal of reduced concern over AI-driven price pressures.
The reaction in precious metals was swift and significant, with over $1.25 trillion added to the sector in a short window following the remarks.
Gold climbed roughly 3.7% on the day, while silver posted an even sharper move, gaining approximately 6% as the debasement trade roared back to life.
However, the bond market offered a far more skeptical read of Warsh’s comments, with Treasury yields rising rather than falling in response to his remarks.
The 10-year Treasury note moved toward 4.46%, suggesting bond investors remained positioned for higher-for-longer interest rates despite the softer tone from the Fed chair.
The divergence between equity and commodity markets on one side and the bond market on the other highlighted the fragile and conditional nature of the rally.
Warsh had previously stressed that prices remain “too high” and gave no indication during his Sintra appearance that a July rate cut was under consideration.
The Fed chair’s firm line on prices means the rally sparked by his offhand remark about AI inflation faces a significant near-term test.
An upcoming U.S. jobs report and the Federal Reserve’s next policy meeting, roughly four weeks away, will determine whether the one-day surge in gold, silver, and Bitcoin has any durable foundation.
