U.S. Secretary of the Treasury Besent analyzes the gold market using a balance sheet format.

Recently, U.S. Treasury Secretary Janet Yellen provided a detailed assessment of the current state of the gold market, closely linked to balance sheet patterns and macroeconomic indicators. According to Odaily, she observed that recent fluctuations in the gold market reflect a typical sell-off, similar to historical cycles.

Typical Sell-Off and Market Signals

Yellen noted that the gold market is experiencing a classic sell-off phase, where large investors are liquidating assets to rebalance their portfolios. Economists point out that the balance sheet patterns of major funds show signs of significant adjustment. Market analysts suggest that this phase often occurs as economic cycles enter expansion, making gold less attractive compared to higher-risk assets.

Expansion Cycle and Balance Sheet Structure

She stated that the cyclical components of the market are currently in an upward growth phase, which can be clearly seen in the balance sheet patterns of major financial institutions. During expansion periods, fluctuations in gold demand often reflect investor sentiment shifting from safe assets to higher-yield investments. This explains why gold prices face downward pressure amid strong economic growth.

Federal Reserve: Policy and Independence

Yellen forecasted that the Federal Reserve is unlikely to take immediate actions to adjust its balance sheet in the near future. She expressed confidence in the independence of Jerome Powell in managing monetary policy decisions, a key factor in maintaining financial system stability. This independence allows policymakers to focus on long-term economic goals rather than short-term political pressures.

Overall, Yellen’s analysis of the balance sheet patterns and the gold market highlights a delicate balance between economic cycles, monetary policy, and investor psychology.