The gold prices rose about 2% to an all-time high of $4,600 per ounce on Monday morning, while silver also set a new record, as a criminal investigation by the Government of donald trump about the chairman of the Federal Reserve, Jerome Powelll, caused investors to once again look for a safe haven.
Spot gold was up 1.9% at $4,596.05 an ounce by 09:31 GMT, after hitting an all-time high of $4,600.33 earlier in the session. US gold futures for February delivery gained 2.3%, to $4,606.20.
“With the Fed’s independence openly in question, the discount for “political risk” normally reserved for emerging markets is moving into the US dollar, driving investors towards hard assets,” said Zain Vawda, analyst at MarketPulse by OANDA.
The futures of Wall Street fell and the dollar posted its biggest decline in three weeks on Monday, as tensions between the Fed and the Trump administration escalated.
The Trump administration threatened to impeach Powell for testimony she gave before Congress last summer, an action the Fed chair called “pretext” for the administration to gain more influence over ratess of interest, which Trump wants to drastically cut.
Major brokerages such as Goldman Sachs and Morgan Stanley expect two rate cuts of 25 basis points each, in June and September.
Trump said he is also weighing a series of forceful responses, including military options, to a violent crackdown on Iranian protests.
The Iran unrest comes as Trump shows America’s strength internationally, having overthrown the Venezuelan president, Nicolas Maduroand discussing the acquisition of Greenland by purchase or by force.
Non-interest-bearing assets, such as gold, tend to do well in a low interest rate environment and during geopolitical or economic uncertainties.
Spot silver rose 5.5% to $84.32 an ounce after hitting an all-time high of $84.60 earlier in the day.
The platinum spot gained 4.6%, to $2,376.75 an ounce, after reaching an all-time high of $2,478.50 on December 29, and the palladium It added 3.3%, to $1,875.50 per ounce.
