Buffalo, NY (WBEN) The prices of gold and silver continue to rise. One local investment analyst says many are keeping an eye on the conflict between Fed Chair Jerome Powell and President Trump.
Over the past year, Michael Angelucci of Level Financial says the price of gold has increased 73 percent, while the price of silver has jumped 180 percent over the past year. "The reasoning is part of the bigger reason why gold and silver have both been going up. Today in particular is the Department of Justice is opening a case against Jerome Powell for potentially, or they're allegedly lying to Congress about the the construction that was going on, that is still going on with the Federal Reserve Building in Washington," says Angelucci. He says the reason why is there's a feeling President Trump wants to get more control of the Federal Reserve so members move interest rates more favorable to what he wants. "Jerome Powell has been and the Federal Reserve has been standing firm with they're going to move based on how they feel the economy is going and where interest rates need to be. So there's this bigger feeling that there's now more pressure on the Federal Reserve, not only to Jerome Powell, but maybe future fed Governor governors that they better do what the President wants, otherwise they may be subject to some sort of investigation or some other retribution," note Angelucci. He says if the markets don't feel that the Federal Reserve is independent, it could be inflationary, and that's why you're seeing some of these precious metals go up. "They are the investment where investors will go when there's fears of inflation down the road," he explains.
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Angelucci says there's another reason why. "The supply of silver has been down, and we still have industrial uses for silver. So a lot of the things that are going on, as far as electronics and data centers and electric vehicles and so forth, and batteries, they all need a little bit of silver. So the demand for silver is there," says Angelucci. He says there's lower supply, so that's driving up the price of silver as well.
He says there's one other nuance with all this. "Rates being pressed down, and gold and silver are looking good because they've been going up in value. People are moving money to that. So people are moving money to gold and silver because interest rates are going down, fear of inflation long term, and bigger banks globally are buying gold is a safe asset to hold, instead of US dollars," says Angelccui. Whether this will continue, he believes, will depend on if there's a feeling that the Federal Reserve is going to remain independent, and where the US is going geopolitically, with with some of their actions.