Gold, Silver Hit Records as Fed Independence Fears, Iran Unrest Fuel Haven Rush

Gold and silver surged to all-time highs on Monday, propelled by mounting concerns over Federal Reserve independence after the U.S. Justice Department threatened a criminal indictment against the central bank, alongside escalating geopolitical tensions as protests in Iran intensified.

Gold climbed toward $4,600 per ounce, while silver approached $85, after Fed Chair Jerome Powell characterized the potential indictment as part of a broader pattern of “threats and ongoing pressure” from the administration aimed at influencing interest-rate decisions. These repeated political challenges to the Fed have contributed to dollar weakness over the past year.

Simultaneously, deadly protests in Iran heightened safe-haven demand amid speculation over potential regime instability. President Donald Trump said Sunday he was considering options regarding Iran, while reiterating threats to acquire Greenland and questioning the value of NATO—coming just over a week after Venezuelan leader Nicolás Maduro was seized.

Precious metals are being revalued upward by a confluence of supportive factors: falling U.S. interest rates, elevated geopolitical friction, declining confidence in the dollar, and institutional risks to the Fed. More than a dozen money managers indicated they are maintaining significant gold exposure, reflecting 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.

Silver jumped nearly 6% to a record $84.5898 an ounce. The white metal surged almost 150% last year, driven by a historic short squeeze in October and ongoing physical tightness in London, as tariff concerns have discouraged metal from moving out of well-stocked U.S. warehouses.

“We see the deficit in the silver market continuing throughout 2026, primarily on higher investment demand,” BMI, a unit of Fitch Solutions, noted on Monday, adding that industrial consumption has also tightened the physical market to unprecedented levels.

Recent U.S. jobs data reinforced expectations for additional Fed rate cuts this year, supporting non-yielding assets like gold. Markets are pricing in at least two reductions, following three consecutive cuts in the second half of 2025.

“Softer U.S. labor market prints have intensified expectations that the Fed will pivot to rate cuts earlier and more aggressively than previously anticipated,” said Priyanka Sachdeva, senior market analyst at Phillip Nova in Singapore. The shift “erodes real yields and heightens the opportunity cost of holding non-yielding assets like gold.”

Investors are also awaiting key policy developments. The U.S. Supreme Court is set to issue an opinion Wednesday on Trump’s tariffs—a ruling against them would mark a major legal and policy defeat. Additionally, results from the Section 232 investigation, which could lead to tariffs on silver, platinum, and palladium, are expected in January.

As of early afternoon in Singapore, gold was up 1.6% at $4,579.44 an ounce, while the Bloomberg Dollar Spot Index dipped 0.1%. Palladium and platinum both advanced more than 3%.