Gold Rockets Past $4,600 on Fed Probe, Safe-Haven Surge
Overview
Gold futures surged to a record high above $4,600 an ounce Monday. A criminal probe into Federal Reserve Chair Jerome Powell fueled concerns over central bank independence, weakening the dollar. Geopolitical unrest, particularly protests in Iran, further boosted demand for gold as a safe-haven asset. Silver also saw significant gains.
Gold Hits New Record High
Gold prices shattered previous records, breaching the $4,600 per troy ounce mark during European trading Monday. This surge was driven by renewed concerns over the independence of the U.S. Federal Reserve and increased demand for safe-haven assets amid escalating geopolitical tensions.
Fed Independence Fears Grip Markets
Futures in New York jumped 2.2% to $4,600.50, after touching an intraday peak of $4,612.70. The catalyst appears to be a criminal investigation launched by U.S. prosecutors into Federal Reserve Chair Jerome Powell concerning his testimony on the Fed's building renovation. This development pushed the dollar lower, with the dollar index shedding 0.4% to 98.75.
Alex Kuptsikevich, chief market analyst at FxPro, noted that the dollar index recorded its worst fall in three weeks. "Fears that the White House could undermine the Fed's independence, filling the [Federal Open Market Committee] with very dovish members," he stated. This situation contrasts sharply with market expectations for only two rate cuts by the end of 2026.
Geopolitical Risk Boosts Safe-Haven Appeal
Rising global uncertainty, including the U.S. capture of Venezuelan leader Nicolas Maduro and ongoing protests in Iran, has bolstered gold's appeal as a secure store of value. Market watchers observe that gold is increasingly viewed as an alternative to fiat currencies, especially with rising public debt and perceived pressure on the U.S. central bank, driving interest in "debasement trading."
Silver Joins Rally
Silver prices also experienced a sharp rise, surging 6.1% to $84.22 an ounce, having earlier hit a record high of $84.69. Investors are now closely monitoring upcoming U.S. economic data and policy signals to gauge the sustainability of this precious metals rally.
