Gold prices crashed last week after a record-setting rally, and Scott Bessent blamed it on reckless trading in China.
Speaking live on Fox News’ Sunday Morning Futures, Scott said, “The gold move thing, things have gotten a little unruly in China. They’re having to tighten margin requirements. So gold looks to me kind of like a classical, speculative blowoff.”
That was his way of saying the spike and sudden fall had little to do with demand and everything to do with panic buying by leveraged traders.
The rally in precious metals had been driven by fears about global conflicts, loose speculation, and growing concern about whether the Federal Reserve still operates freely. Then it collapsed.
Chinese authorities raised margin requirements, and the money dried up. The price didn’t fall because of the economy. It fell because regulators in China yanked the brakes on traders who had gone way too far.
Scott pushes Senate to start hearings despite Powell investigation
While traders were getting burned in the gold market, Scott was also dealing with a political standoff in Washington. He said the Senate should get moving with confirmation hearings for Donald Trump’s Federal Reserve pick, Kevin Warsh.
Kevin was nominated on January 30 to replace Jerome Powell, but the process has been blocked.
Senator Thom Tillis from North Carolina is behind the delay. He said he won’t let any of Trump’s Fed nominations go through until the Department of Justice finishes a criminal investigation into Powell.
The case is about comments Powell made to Congress last year about the costs of renovations at the Fed’s headquarters. Tillis said he was a witness and called it a threat to the Fed’s independence.
Even with that, Scott reminded everyone that Tillis had also called Kevin a strong candidate. “Senator Tillis has come out and said he thinks that Kevin Warsh is a very strong candidate,” Scott said. “So I would say: Why don’t we get the hearings under way and see where Jeanine Pirro’s investigation goes.” Pirro is the U.S. attorney running the case in D.C.
Scott outlines Fed policy, Japan ties, and Trump’s economy
Scott also spoke about how the Federal Reserve is handling its giant balance sheet. He said not to expect any sudden cuts.
“I wouldn’t expect them to do anything quickly,” he said. “They’ve moved to the ample-regime policy, and that does require a larger balance sheet, so I would think that they’ll probably sit back, take at least a year to decide what they want to do.”
On Kevin Warsh’s independence, Scott said Kevin “is going to be very independent, but mindful that the Fed is accountable to the American people.” He also said if Kevin didn’t lower rates like Trump wants, it would be up to the president to sue him.
Outside the Fed mess, Scott congratulated Japanese Prime Minister Takaichi Sanae for her coalition’s election win.
“She is a great ally, great relationship with the president,” Scott said. He added that Japan’s strength supports U.S. strategy in Asia, especially now with Donald Trump back in the White House.
When asked about how the economy was doing, Scott said:
“President Trump’s economy is delivering real results for the American people. POTUS’ policies are driving strong growth, bringing down inflation, and taking the stock market to historic highs, all while achieving the lowest crime rate in over a hundred years.”
Scott added that in 2025, Trump laid the foundation for strong job gains and income growth in 2026.
“The stock market lives in the future,” Scott said, “and its historic performance is a signal from Wall Street that Main Street will soon harvest the rewards from POTUS’ economic policies.”