Recently, the volatility in precious metals has indeed attracted a lot of attention. Gold has fallen nearly 10%, and silver has plummeted about 27%. At first glance, it seems like a major event, but a closer look at the logic reveals that this currency depreciation-driven trading is far from over.

The core issue lies in the Federal Reserve's policy shift. Since Powell signaled a dovish stance at the Jackson Hole meeting, the market has been betting on a certain logic: under enormous public debt and political pressure, the Fed will be forced to shift from fighting inflation to supporting the economy and employment, effectively diluting the dollar's value through rate cuts. This is what is called "currency depreciation trading."

Last Friday's sharp decline was indeed alarming, but if you look at the daily chart, you'll see that the 27% drop in silver only brought the price back to January 9 levels, and the 10% decline in gold just returned to January 20 levels. In other words, this correction is just a small retracement of the previous gains, far from enough to shake the entire logic.

Interestingly, after Kevin Warsh was nominated last Friday, market interpretations of him were actually dovish. Although some thought this might change anything, the futures market's reaction was very clear — it expects more rate cuts. This is fundamentally positive for currency depreciation trades. And think about it, Warsh's biggest fear is being turned against like Powell by Trump; the only way out is to cut rates quickly.

From a fundamental perspective, high and rising public debt, along with elevated long-term yields, will inevitably increase political pressure on the Fed. Regardless of who the next chair is, this trading logic driven by market seeking debt monetization safe havens still has a long way to go.

Therefore, although recent precious metal prices have pulled back, it does not change the market's long-term concerns about the Fed's easing stance and the dollar's creditworthiness. The wave of trading formed after the Jackson Hole meeting is expected to continue driving long-term gains in assets like gold. The correction last Friday, like the one in October, may just be a temporary pause, and prices could surge again afterward.