Gold Hits Record Above $4,600 as Geopolitical Risks and Fed Independence Fears Mount

Investors rushed into gold as rising geopolitical risks and renewed doubts about Federal Reserve independence rattled markets and weakened the dollar.

A worker polishes gold bullion bars at the ABC Refinery in Sydney on Aug. 5, 2020. David Gray/AFP via Getty Images

Gold prices surged to a fresh all-time high on Jan. 12, breaking more than $4,600 per ounce, as escalating geopolitical tensions and investor concerns about Federal Reserve independence reignited demand for safe-haven assets, battered the dollar, and weighed on stocks.

Spot gold rose by more than 2.3 percent to $4,615.36 per ounce as of 10:07 a.m. EST on Jan. 12, while U.S. gold futures for February delivery climbed by more than 2 percent to $4,611.3, after briefly surging to about the $4,626 mark in earlier trading.

Silver also surged to a new peak, with spot prices rising by 6.6 percent to $85.22 per ounce as of 10:04 a.m. EST.

The rally in precious metals unfolded alongside a broad pullback in risk assets.

Wall Street futures slid, and the dollar fell by the most in three weeks as tensions between the Fed and the Trump administration escalated, compounding geopolitical turbulence that includes a deadly regime crackdown on protesters in Iran and U.S. President Donald Trump’s threats of a strong response, including possible U.S. military intervention.

Fed Concerns Reignite ‘Sell America’ Trade

Investor unease intensified after news broke over the weekend that the Department of Justice (DOJ) served the Federal Reserve with grand jury subpoenas and threatened to indict Federal Reserve Chairman Jerome Powell over congressional testimony he gave last summer, a move Powell called “pretexts” for the Trump administration to gain more influence over interest rates, which Trump has repeatedly pressed to be cut sharply.

“The dollar sold off across the board as the Fed received DOJ subpoenas, reigniting both independence risks and a brief return of ‘sell-America’ trade,” analysts at ING wrote in a note. “It’s wait-and-see mode now as markets try to assess the effective implications of all this.”

Trump has repeatedly said the Fed is behind the curve on rate cuts, blaming current monetary settings for keeping borrowing costs elevated and restraining growth even as inflation has cooled and labor markets show signs of softening. Much of his criticism has focused on Powell, whom he has accused of incompetence and political bias.

Powell has countered that policy decisions remain data-driven, saying that persistent inflationary pressures explain why rates have not been cut faster.

Haven Demand Reinforced by Global Flashpoints

Renewed worries about Fed independence have added to a frenetic start to 2026, which has already seen the capture of former Venezuelan leader Nicolás Maduro by U.S. forces, renewed American pressure on Cuba, an escalation of rhetoric about taking control of Greenland, and a rising death toll from Iran’s clampdown on protesters.

“Whilst the calendar may have changed by a year, the financial and geopolitical situation remains the same, and this is the volatility which gold thrives on,” Vince Stanzione, CEO and founder of First Information, told The Epoch Times in an emailed statement.

Stanzione said the recent bull market in bullion is not new and that it “really took off” in 2022 with the U.S. decision to freeze Russian assets following the Kremlin’s invasion of Ukraine, sending a signal that reserve assets held within the Western financial system could be subject to political decisions.

“Gold held in a central bank vault has no counterparty risk,” Stanzione said, noting that he believes that the gold rally will continue, predicting that prices could reach $7,000 per ounce by 2028.

“Remember, it’s not gold going up, it’s the world currencies going down. All major fiat currencies continue to be devalued as we see no end to money printing.”

Major banks remain constructive on bullion. Morgan Stanley recently forecast gold at $4,800 per ounce by the fourth quarter of 2026, citing falling interest rates, central bank buying, and persistent geopolitical risk. JPMorgan Chase has raised its outlook even further, projecting $5,000 per ounce by late 2026 and $6,000 over the longer term.

Gold finished 2025 up by 64 percent, its strongest annual performance since 1979.

Strength is not limited to gold. Other precious and industrial metals have also posted outsized gains, reflecting deeper structural changes in global commodity markets. Silver surged by 147 percent in 2025—its strongest annual gain on record—driven by industrial demand, investment inflows, and persistent supply tightness.

“Investor appetite remains strong, as silver-backed [exchange-traded funds] continue to attract inflows,” ING analysts said in a recent note, describing the 2026 outlook as “constructive,” supported by demand from solar panels and battery technologies.

Zain Vawda of MarketPulse by OANDA said the path for silver “is open toward $90 and potentially $100 per ounce if the industrial squeeze tightens,” noting that a narrowing gold-to-silver ratio suggests that “silver has more room to run than gold in percentage terms.”

Beyond precious metals, ING analysts said, copper, aluminum, rare earths, and specialty alloys are increasingly influenced by electrification, defense spending, and data center expansion. At the same time, years of underinvestment, tighter permitting, and resource nationalism have made supply slower to respond, raising the likelihood of sustained tightness and higher price volatility across the metals complex.

Reuters contributed to this report.