A New Fed Chair, Same Questions for Gold
The expected nomination of Kevin Warsh as the next chair of the Federal Reserve may grab political headlines, but for now it does little to alter the outlook for gold in 2026. That’s the view of Thu Lan Nguyen, head of commodity and FX research at Commerzbank, who says the appointment is unlikely to end tensions between the White House and the central bank—or derail gold’s underlying support.
Speaking to Bloomberg TV on Friday, Nguyen said markets may be overestimating how much Warsh’s leadership would change the policy landscape.
“I wouldn’t say it changes things—at least not yet,” she noted, adding that she would not characterize Warsh as meaningfully more hawkish than his rivals.
Loyalty, Not Policy, Is the Real Divide
According to Nguyen, the key distinction between Warsh and other potential candidates—particularly former frontrunner Kevin Hassett—has less to do with interest-rate philosophy and more to do with perceived allegiance to President Trump.
“Markets are questioning whether Warsh would be as loyal as someone like Hassett,” she said. “And Trump has been quite clear about what he expects from a Fed chair. If those expectations aren’t met, the attacks on the Fed are unlikely to stop.”
In other words, even with Warsh at the helm, political pressure on the central bank may persist. Nguyen stressed that this dynamic would not simply disappear with a change in leadership, regardless of whether Warsh is viewed as more conservative or more independent than Jerome Powell.
What This Means for Rates—and Gold
Nguyen was also asked whether the so-called U.S. dollar debasement trade would survive under a Warsh-led Fed, and whether recent sharp declines in precious metals presented a buying opportunity.
She acknowledged that forecasting in the current environment remains difficult, but pointed to a familiar pattern.
“Recent corrections have often been used by markets to establish new long positions,” she said. “Typically, those pullbacks haven’t lasted very long.”
In a follow-up report, Nguyen expanded on that view, cautioning investors against drawing sweeping conclusions from the nomination alone.
Pressure on the Fed Isn’t Going Away
While Warsh brings experience as a former FOMC governor, Nguyen emphasized that President Trump’s stance on rates remains unchanged.
“The president has made it sufficiently clear that he wants significantly lower interest rates,” she wrote. “There’s little reason to believe that position will soften anytime soon.”
That leaves the door open for continued pressure on the Fed—and potentially deeper rate cuts than markets are currently pricing in.
Nguyen believes this dynamic increases the odds that monetary policy ultimately turns more accommodative, which would help underpin gold prices even if volatility persists in the short term.
Gold’s Pullback Looks More Like Profit-Taking
From Nguyen’s perspective, the recent sharp selloff in gold reflects profit-taking rather than a shift in fundamentals.
“The extent of the correction suggests that market participants were simply waiting for an opportunity to lock in gains after a rapid rise,” she concluded, adding that gold remains well supported in an environment where rates could fall further than expected.
Market Confidence and the Fed’s Credibility
Other market voices echoed the view that Warsh’s nomination could stabilize, rather than unsettle, investor sentiment.
Eric Teal, Chief Investment Officer at Comerica Wealth Management, said Warsh’s background should reassure markets concerned about the Federal Reserve’s independence.
“He brings prior experience as a Fed Governor and as an investor,” Teal said. “That combination suggests a strategic approach to policy, including balance-sheet reduction, deregulation, and potential rate cuts if inflation continues to ease—factors that could be supportive for both the economy and markets.”
Relief—Tempered by Uncertainty
Meanwhile, Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, noted that while markets appear relieved by Warsh’s nomination, they may also be recalibrating expectations.
“Investors were hoping for a more dovish outcome,” he said. “And as we’ve seen many times before, Fed Chairs often develop a style and legacy that diverges from what markets—and even the presidents who appointed them—anticipated.”
Zaccarelli emphasized that confidence remains the Fed’s most valuable asset, regardless of who leads it.
Gold Reacts, but the Story Isn’t Finished
Gold prices reflected the volatility surrounding the announcement. Spot gold slid to $4,941.50 per ounce in overnight trading before rebounding modestly. One hour into the North American session, the metal was trading near $5,037, still down more than 6% on the day.
Despite the sharp move, analysts caution against reading too much into short-term price action. For now, the Warsh nomination may shift perceptions—but it hasn’t changed the broader forces supporting gold.
