Gold reaches record levels as political tensions drive demand for safe-haven assets
Gold prices surged to unprecedented levels today, reflecting heightened investor anxiety amid escalating geopolitical tensions and growing uncertainty around US monetary policy leadership.
Spot gold climbed sharply, trading around $4,585 per ounce after briefly breaking above the $4,600 mark for the first time. US gold futures for February delivery also advanced strongly, signalling sustained demand for bullion as a defensive asset. Silver followed a similar trajectory, rising to a new all-time high, while platinum and palladium also recorded notable gains.
Market analysts pointed to a combination of global instability and political pressure on the US Federal Reserve as key drivers of the rally. According to Tim Waterer of KCM Trade, developments in the Middle East, alongside reports that Jerome Powell is the subject of a criminal investigation, unsettled equity markets and encouraged investors to rotate into precious metals.
Unrest in Iran has intensified in recent days, with hundreds reported killed and warnings issued against potential US military involvement under President Donald Trump. These developments come at a time when the Trump administration is also signalling a more assertive stance in other international disputes, adding to broader market unease.
Powell stated that the administration had threatened him with criminal charges linked to previous Congressional testimony, describing the move as an attempt to exert further pressure on the central bank to reduce interest rates. Expectations around US rate cuts remain fluid. While Goldman Sachs recently delayed its outlook for monetary easing, it now anticipates two quarter-point reductions in mid to late 2026.
Precious metals typically benefit during periods of low interest rates and political instability, as they offer no yield but are perceived as stores of value. Silver prices rose above $84 per ounce, with analysts such as Soni Kumari of ANZ suggesting further upside amid ongoing policy uncertainty and potential supply constraints linked to China.
Platinum and palladium also strengthened, reflecting broader momentum across the metals complex as investors continue to seek protection from volatility in global markets.
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