Hong Hao: Precious metals could rise back up, with the bottom of silver at around $75-80 per ounce.

In recent days, the epic seismic activity in gold and silver has amazed global investors. Hong Hao, Chief Investment Officer of Lianhua Asset Management, pointed out on CNBC that gold and silver are likely to return to their previous highs and still have room for further upside, but it will take some time for the market to settle down. After the dust settles, precious metals will resume their upward trend. In his view, the bottom for silver is around $75-80 per ounce and for gold slightly below $5000 per ounce. Hong Hao believes that the recent plunge in precious metals is generally interpreted as being caused by Trump nominating hawkish Kevin Warsh to succeed as Chairman of the Federal Reserve, triggering a reversal in "currency devaluation trading", with the US dollar strengthening again, leading to extreme selling in leveraged precious metal trades. However, he believes that since 2008, the Federal Reserve has never been truly independent, and Trump has a strong desire to intervene in Fed policy. Even if this candidate in the future attempts to suppress inflation expectations by raising interest rates and shrinking the Fed's balance sheet, Trump may be unhappy with this, which could weaken the wealth effect.