Gold cracks USD4,600/oz as Fed uncertainty fans safe-haven rush

Gold hit a record above USD 4,600 per ounce on Monday, and silver reached a fresh peak as investors piled into safe-haven assets after uncertainty deepened over a Trump administration criminal probe into Federal Reserve Chair Jerome Powell.

Spot gold was up 2.2% at USD 4,609.58 per ounce as of 1:38 p.m. ET (1838 GMT), after earlier hitting a record high of USD 4,629.94. US gold futures GCcv1 for February delivery settled 2.5% higher at USD 4,614.70.

“Elevated uncertainty plays directly into the gold market, (and) every week we seem to have another area of uncertainty added,” said Michael Haigh, global head of commodities research at Societe Generale.

The backdrop underpinning the rally looked unlikely to reverse anytime soon, he added. Gold surged more than 64% last year, its best performance since 1979, while silver logged its strongest year on record with a 146.8% gain.

US President Donald Trump’s administration has intensified pressure on the Fed, threatening to indict Chair Jerome Powell over his comments on a building renovation project, an act Powell called a “pretext” to gain control over the rate cuts Trump seeks.

Powell’s term ends in May. The Trump administration is expected to interview BlackRock’s Rick Rieder as a potential candidate to succeed him, Fox News reported.

The Fed is expected to hold rates steady at its January 27–28 meeting, after cutting them by 75 basis points last year. However, markets are still pricing in two further rate cuts later this year, boosting appetite for non-yielding assets like gold.

Geopolitical tensions also remained elevated as Trump weighed potential responses to a deadly crackdown on protests in Iran, following his removal of Venezuelan President Nicolas Maduro and floating the idea of acquiring Greenland.

Spot silver hit an all-time high of USD 86.22, and was later up 6.8% at USD 85.39 per ounce.

Gold and silver “go together,” said Ned Naylor-Leyland, gold and silver fund manager at Jupiter Asset Management, but “when silver captures flow, (it) really runs because it’s a smaller channel and it’s more sensitive to the flows in and out.”

Spot platinum climbed 3% to USD 2,342.10 per ounce, while palladium gained 2.5% to USD 1,861.44.

(Reporting by Anmol Choubey in Bengaluru; Additional reporting by Naomi Rovnick in London; Editing by Jan Harvey, Susan Fenton, and Alan Barona)