Metals retreat as general optimism and strong dollar weigh on ommodities

General optimism surrounding the geopolitical landscape has put downward pressure on commodities, with all major metals opening the week in negative territory. Hence, gold and silver fell by 1.66% and 1.58%, respectively.

Analysts attribute the pullback in part to last Friday’s sharp reversal, when initial excitement over potential U.S. interest-rate cuts collided with uncertainty following President Donald Trump’s nomination of former Fed Governor Kevin Warsh to succeed Jerome Powell as Federal Reserve Chair after his term ends in May.

The nomination triggered a reassessment of Fed policy expectations, causing volatility in markets that had been buoyed by earlier optimism.

The strength of the U.S. dollar also played a significant role in the metals' decline. A stronger dollar makes dollar-denominated metals like gold less attractive to foreign investors, while rising interest rates increase the opportunity cost of holding non-yielding assets such as gold, as Treasurys become a more appealing safe-haven alternative.

Finally, not just gold and silver have seen a decline. Indeed, other industrial metals also opened the week lower, with palladium down 2.71%, platinum falling 3.96%, and copper retreating 2.21%, reflecting broad risk‑off sentiment across the commodity sector.

Benedetta Zimone