Gold prices have shattered records this week, climbing past $4,600 per troy ounce as investors flock to the safe-haven asset with rising concerns over the independence of the US Federal Reserve.
Spot gold reached a new all-time high, with futures on the Comex exchange exceeding $4,600 and trading as high as $4,610 in recent sessions. As of January 12, live gold prices hover around $4,590 to $4,600 per ounce, reflecting strong upward momentum.
Investors traditionally view bullion as protection against uncertainty in tumultuous times. Analysts attribute the rally to worries about central bank independence, combined with geopolitical tensions and expectations of further US interest rate cuts. Precious metals like gold and silver both posted sharp gains, with silver showing even stronger percentage increases in some trading periods. Tight physical supplies and ongoing central bank purchases have further strengthened the rally.
DOJ launches criminal investigation into Jerome Powell
Federal prosecutors are said to have opened a criminal probe into Federal Reserve Chair Jerome Powell, focusing on his June testimony to the Senate Banking Committee about renovations to the Fed’s headquarters. The Department of Justice served grand jury subpoenas to the central bank on Friday, threatening potential indictment.
Powell addressed the issue in a rare video statement, calling the action “unprecedented” and insisting it stems from political pressure rather than the renovation project itself. He explained that the Fed sets interest rates based on economic evidence, not presidential preferences. The investigation escalates long-standing tensions between President Trump and Powell, whom Trump has repeatedly slammed for not lowering borrowing costs aggressively enough.
Market impact: Dollar weakens as Fed independence questioned
The US dollar declined against major currencies following news of the subpoenas. Market participants express growing alarm that political interference could undermine the Fed’s credibility as the world’s most influential central bank.
Analysts describe the situation as open conflict between the administration and the Fed. Such developments drive capital toward gold, reinforcing its status as a hedge against inflation, policy uncertainty, and potential erosion of institutional trust.
Ray Attrill, head of FX strategy at National Australia Bank, explicitly used the term “open warfare” in his analysis:“Powell has had enough of the carping from the sidelines and is clearly going on the offensive. This open warfare between the Fed and the U.S. administration – and to the extent that you take Powell’s comments at face value – it’s clearly not a good look for the US dollar.”
Outlook for gold in 2026
Experts forecast continued strength in gold prices throughout the year, with some forecasts targeting $5,000 or higher if geopolitical shenanigans and rate-cut expectations continue. The combination of record-breaking gold prices and the high-profile investigation into Powell highlights a pivotal moment for global financial markets.
