Gold Breaks $4,600, Fed Uncertainty Sparks Safe-Haven Trend
Gold and silver prices surged to new records as markets became increasingly risk-off, fueled by concerns over the Federal Reserve's independence following the escalating criminal investigation involving Fed Chairman Jerome Powell. Investors sought safe-haven assets, while the dollar weakened and volatility in US political headlines increased again.
This rally strengthened after gold briefly reached an intraday peak of US$4,629/oz, while silver briefly reached US$86.22/oz before retreating slightly from its peak.
Meanwhile, Michael Haigh, global head of commodities research at Societe Generale, assessed that gold's surge reflects the accumulation of uncertainty that continues to grow week after week. According to him, the backdrop supporting the precious metal's rally shows no signs of reversing anytime soon.
In terms of triggers, the Trump administration is increasing pressure on the Fed, while Powell revealed the existence of grand jury subpoenas and the threat of criminal proceedings related to his testimony regarding the Fed headquarters renovation project. Powell described this situation as a form of pressure that could potentially undermine the central bank's independence in setting interest rates.
Interest rate expectations also contribute to gold's appeal: the market is still weighing the scope for further easing this year—and any hint of a rate cut tends to support non-yielding assets like gold.
At the same time, geopolitical tensions (including Iran) are adding to the reasons investors are increasing their defensive positions.
Silver has been riding the wave of the precious metal rally, but its movements tend to be more aggressive because the silver market is relatively smaller and more sensitive to capital inflows and outflows. (yds)
Source: Newsmaker.id
