Gold, silver hit record highs as inflation data cements Fed rate cut bets

Gold hit a record high on Tuesday, as US inflation data cemented bets on Federal Reserve rate cuts this year and persistent geopolitical and economic uncertainties drove safe-haven demand, while silver also hit a fresh peak.

Spot gold steadied at USD 4,591.49 per ounce as of 01:31 p.m. ET (1831 GMT), following a record high of USD 4,634.33 earlier in the session. US gold futures for February settled 0.3% lower at USD 4,599.10.

“The reason for the slightly positive tone across the board in the markets was the benign CPI data (which) portends a higher likelihood of Fed rate cuts in the future,” said David Meger, director of metals trading at High Ridge Futures.

The US core Consumer Price Index rose 0.2% month-on-month and 2.6% year-on-year in December, falling short of analysts’ expectations of 0.3% and 2.7%, respectively.

Trump reiterated his push to cut interest rates “meaningfully” after the inflation data.

The Fed is expected to keep rates steady at its January 27-28 meeting, though investors currently anticipate two interest rate cuts this year. Lower interest rates tend to be favourable for non-yielding bullion.

Fundamental factors like geopolitical tensions and questions over Fed independence continue to support safe-haven gold, said Meger.

Concerns over Fed independence grew after the Trump administration opened a criminal investigation into Fed Chair Jerome Powell, drawing criticism from former Fed chiefs and global central bankers.

Trump has also threatened to slap a 25% tariff on countries trading with Iran, risking reopening old wounds with Beijing, Tehran’s top partner. Elsewhere, Russia struck cities across Ukraine with missiles and drones overnight.

Commerzbank raised its 2026 year-end gold forecast to USD 4,900.

Meanwhile, CME Group said on Monday it will adjust margin setting for precious metals to address market volatility.

Elsewhere, spot silver gained 2.1% to USD 86.74 per ounce, after hitting an all-time high of USD 89.10 earlier in the session.

“Despite technical indicators screaming correction, traders continue to favor bullish options (for silver)… Investors should prepare for sharp countermoves within this high-volatility environment, even as the broader bullish bias remains intact,” said Hugo Pascal, a precious metals trader at InProved.

Spot platinum was unchanged at USD 2,343.35 per ounce, and palladium rose 1.4% to USD 1,868.68 per ounce.

(Reporting by Anmol Choubey in Bengaluru; Editing by Vijay Kishore, Krishna Chandra Eluri, and Sahal Muhammed)