Bessent Says ‘Unruly’ Chinese Trading Drove Sharp Swings in Gold Prices

U.S. Treasury Secretary Scott Bessent attributed last week’s sharp volatility in gold prices to “unruly” trading activity in China, saying speculative behavior there had forced authorities to tighten margin requirements.

Speaking on Fox News, Bessent said the recent moves in gold resemble a “classic speculative blowoff,” noting that market conditions in China have become increasingly disorderly, with clear spillover effects on global gold prices.

His comments followed a record-breaking rally in precious metals, fueled by speculative buying, geopolitical tensions and growing concerns over the Federal Reserve’s independence, before the rally abruptly reversed late last week.

The market turmoil helped push the dollar to its first weekly gain since early January, while the Dow Jones Industrial Average climbed above 50,000 for the first time ever — a sign of rising investor confidence in the strength of the U.S. economy and corporate earnings.

With U.S. midterm elections set for November, Bessent pointed to the Dow’s milestone as evidence that the American economy is entering an upward cycle that could deliver tangible benefits for everyday Americans.

On Federal Reserve policy, Bessent said he expects the central bank to proceed cautiously when it comes to reducing its balance sheet, stressing that any such move is unlikely to happen quickly.

“I wouldn’t expect them to do anything fast,” he said. “They’ve shifted to an ample-reserves framework, which requires a larger balance sheet. I think they’ll step back and probably take at least a year to decide what they want to do.”

Addressing President Donald Trump’s nomination of Kevin Warsh as the next Fed chair, Bessent said Warsh would be independent in his decision-making, while remaining mindful that the central bank is ultimately accountable to the American public.

During a Senate hearing, Bessent told lawmakers that it would be up to Trump to decide whether to take legal action against Warsh if he failed to cut interest rates as the president prefers. Pressed by Senator Elizabeth Warren, Bessent said the comment stemmed from a joke by Trump, while defending Warsh’s credentials and emphasizing Trump’s expectation that the nominee align with his views on interest rates.