Gold Volatility Linked to Chinese Trading; Fed Balance Sheet Outlook: Feb 8, 2026

Treasury Secretary Scott Bessent attributed recent wild swings in gold prices to "unruly" trading in China, citing tighter margin requirements there as a catalyst. The abrupt reversal in the precious metals rally lifted the U.S. dollar to its first weekly gain since early January and sent the Dow Jones Industrial Average to 50,000 for the first time in early February. Bessent expects the Federal Reserve to act cautiously in trimming its balance sheet, likely taking at least a year to decide, given current accommodative policy. He praised the independence of potential Fed Chair nominee Kevin Warsh while noting Trump’s preference for lower interest rates and the potential for legal action if Warsh does not align with those views.