Precious Metals Rally as Dollar Weakens: Bessent Points to China for Market Volatility

CHICAGO – Gold and silver prices pushed higher on Tuesday as the U.S. Dollar Index (DXY) retreated from recent highs. The surge comes as veteran macro investor and potential policy influencer Scott Bessent warned that the current market turbulence is deeply rooted in China’s shifting economic strategies.

The Gold & Silver Surge

With the dollar showing signs of fatigue, investors are flocking back to hard assets.

• Gold: Reclaimed its bullish momentum, benefiting from a weaker greenback.

• Silver: Outperformed gold in percentage terms, driven by industrial demand and its role as a "cheaper" inflation hedge.

Bessent’s China Analysis

Scott Bessent highlighted that the volatility seen in the currency and metal markets isn't just a domestic U.S. issue. He attributed the recent swings to China’s aggressive liquidity injections and their efforts to de-risk from dollar-denominated assets.

"The volatility we are witnessing is a direct echo of Beijing’s credit cycle," Bessent noted. "As China tries to stabilize its internal property market, the global 'safe haven' trade—specifically gold—is reacting to the potential devaluation of the Yuan."

Market Outlook

If the dollar continues its downward trajectory and China maintains its current fiscal path, analysts expect silver to test new multi-year resistance levels by the end of Q1 2026.