Trump’s attack on Fed skyrockets gold, silver to record highs

Donald Trump’s latest salvo in his war against the independence of the Federal Reserve sent gold and silver prices to new all-time highs Monday.

Nevada is the nation’s largest gold producer, and the second largest producer of silver, after Alaska.

Over the weekend, Fed Chair Jerome Powell announced he was under investigation by the Trump administration. The investigation is ostensibly about mismanagement of renovations at the Fed building in Washington. But Trump has been hounding and verbally abusing Powell for most of the last year in what critics worry is a sign that once Powell’s term is up, Trump will effectively become the person setting interest rates in the U.S.

When central bank institutions in other countries — Argentina, Turkey, Zimbabwe, Hungary — have lost their independence and come under the control of a politician, credibility in and value of the nation’s currency has gone down, and prices have gone up. 

Politicization of central banks creates a specter of volatility that drives some investors to seek shelter from debased currency. Gold and silver are viewed as safe havens.

Gold hit $4,600 an ounce for the first time Monday, at one point reaching $4,640. Silver hit an all-time high of $86.34 an ounce.

Surging gold and silver prices come on the heels of a banner year for precious metals.

The share prices of Nevada’s primary mining corporations were also boosted  Monday. That too is a continuation of last year, when Newmont Corp.’s shares soared by more than 180%, and Barrick Mining Corp’s share price shot up more than 200%.

Barrick is the operator of Nevada Gold Mines, a joint venture with Newmont. Last year, the venture accounted for more than two-thirds of the gold mined in Nevada.