Gold and silver storm to records as Fed fight, Iran spur demand

Among the drivers, falling US interest rates, heightened geopolitical tensions, lower trust in the US dollar, and the challenge to the Fed have aided gold and silver.

• Gold and silver hit record highs amid Fed indictment threat and Iran protests
• Fed's independence concerns and geopolitical tensions boost precious metals demand.
• Supreme Court to rule on Trump's tariffs, affecting market sentiment

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Gold and silver climbed to record highs as the US Justice Department threatened the Federal Reserve with a criminal indictment, reviving concerns over its independence, while protests in Iran supported haven demand.

The yellow metal spiked toward $4,600 an ounce, while silver neared $85, after Fed Chair Jerome Powell said the potential indictment “should be seen in the broader context of the administration’s threats and ongoing pressure” to influence the bank’s interest-rate decisions. The dollar weakened and US 10-year Treasury yields edged higher after his comments. Repeated attacks on the Fed last year by the Trump administration were a major factor hurting the dollar and aiding gold.

Deadly protests in Iran, meanwhile, increased the haven appeal of precious metals on the possibility the Islamic Republic could be overthrown. US President Donald Trump said Sunday he was mulling potential options on Iran, while reiterating threats to take Greenland and questioning the value of the NATO alliance, just over a week after seizing Venezuelan leader Nicolas Maduro.

Precious metals are at the center of a powerful upward re-rating on a confluence of tailwinds that has supercharged demand. Among the drivers, falling US interest rates, heightened geopolitical tensions, lower trust in the US dollar, and the challenge to the Fed have aided gold and silver. More than a dozen money managers said they’ve opted not to take too much money off the table in gold, holding conviction in its long-term appeal.

“It’s a reminder of how many uncertainties markets are juggling — geopolitics, the growth/rates debate, and now a fresh headline-driven reminder of an institutional risk premium,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore.

The US Supreme Court, meanwhile, set Wednesday for the next opinion on Trump’s tariffs. A ruling against the levies would undercut his signature economy policy and deliver his biggest legal defeat since returning to the White House.

Silver jumped almost 6% to a record $84.6090 an ounce. The white metal surged almost 150% last year as a historic short squeeze gripped the market in October, and the dominant spot market in London saw continued tightness as tariff fears prevent metal from flowing from packed warehouses in the US.

“We see the deficit in the silver market continuing throughout 2026, primarily on higher investment demand,” BMI, a unit of Fitch Solutions Inc. said in a note on Monday, adding that industrial demand also tightened the physical market to an unprecedented degree.

Traders are also waiting for results from the Section 232 investigation that may lead to US tariffs on silver, platinum and palladium. That report is expected in January.

Read More: Trump’s Options If Supreme Court Says His Tariffs Are Illegal

Last week’s US jobs data left expectations for additional interest-rate cuts intact, supporting non-yielding precious metals. Markets have priced in at least two cuts this year, after the Fed delivered three consecutive reductions in the second half.

“Softer US labor market prints have intensified expectations that the Fed will pivot to rate cuts earlier and more aggressively than previously anticipated,” Priyanka Sachdeva, senior market analyst for brokerage Phillip Nova Pte in Singapore wrote in a note. The shift “erodes real yields and heightens opportunity cost of holding non-yielding assets like gold,” she added.

Gold rose as much 2%, and traded 1.6% higher at $4,584.44 an ounce at 3:31 p.m. in Singapore. The Bloomberg Dollar Spot Index dipped 0.2%. Both palladium and platinum advanced more than 3%.