Gold Prices Stay Near All-Time High as Fed Chair Powell Faces Criminal Investigation

TLDR

• Gold prices stabilized near record levels at $4,596 per ounce on Tuesday after a 2% gain the previous day
• Trump administration launched criminal investigation into Federal Reserve Chairman Jerome Powell over congressional testimony
• Powell called the probe an attempt to pressure the Fed on interest rates and vowed to maintain central bank independence
• Anti-government protests in Iran and threats over Greenland added to geopolitical uncertainty supporting gold demand
• Citigroup predicts gold will reach $5,000 and silver will hit $100 within three months

Gold remained near all-time highs on Tuesday as the precious metal benefited from political turmoil surrounding the Federal Reserve. Spot gold held at $4,596 per ounce following Monday’s 2% rally that pushed prices to a record $4,629.40.

The Trump administration delivered grand jury subpoenas to Fed Chairman Jerome Powell and opened a criminal investigation. The probe focuses on Powell’s June testimony to Congress regarding renovation costs at the Fed’s headquarters building.

Powell responded with a public statement rejecting the investigation. He described the subpoenas and indictment threats as attempts to force the Federal Reserve to change its interest rate policies.

The Fed chairman emphasized that monetary policy decisions will continue to be based on economic data rather than political demands. His current term expires in May 2026, adding uncertainty about future Fed leadership and policy direction.

Treasury Secretary Scott Bessent and several Republican lawmakers cautioned President Trump about potential market damage from the investigation. The dollar declined on Monday while Treasury bonds sold off as investors reacted to the news.

Safe-Haven Assets Benefit from Political Uncertainty

BNP Paribas strategist David Wilson stated that questions about Fed independence will likely drive gold markets throughout 2026. Traders moved capital into gold and other safe-haven assets amid concerns about political interference in monetary policy.

President Trump has repeatedly demanded lower interest rates since returning to office. The administration’s pressure campaign represents an unusual challenge to the Federal Reserve’s traditional autonomy in setting policy.

Saxo Bank strategist Ole Hansen explained that speculative traders are fueling current gold market activity. These momentum investors buy during price increases but exit positions quickly when trends reverse.

Geopolitical Tensions Support Precious Metals

Protests in Iran against the government prompted warnings from the United States about potential intervention. The unrest raised fears about wider instability across the Middle East region.

ING analysts noted that Iranian tensions keep geopolitical risks high and continue supporting gold purchases. President Trump also renewed threats to take control of Greenland and seized power from Venezuela’s government, adding to global uncertainty.

Silver reached a record $86.22 per ounce on Monday before settling at $84.94 on Tuesday. The metal saw a historic short squeeze in late 2025 that drove prices sharply higher in December.

Platinum rose more than 3% on Monday before declining 1.4% to $2,310.09 on Tuesday. Copper prices stayed near record levels from last week.

CME Group announced it will change margin calculations for precious metals futures contracts. Starting Tuesday, margins will be set as a percentage of notional value instead of fixed dollar amounts due to recent price volatility.

Citigroup projects gold will climb to $5,000 per ounce over the next three months. The bank also forecasts silver prices will reach $100 during the same timeframe as political and economic uncertainty persists.

Markets waited for US Consumer Price Index data scheduled for release Tuesday afternoon.

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