Gold surged to unprecedented levels as political risk and macroeconomic uncertainty intensified, with the investigation involving Jerome Powell adding to market anxiety. Prices pushed beyond the $4,600-an-ounce threshold for the first time, with spot gold reaching $4,601.17 and futures climbing to $4,612.40 an ounce.
Silver has continued its own remarkable rally, also setting fresh records at $84.653 an ounce in spot trading. The metal advanced by almost 150% during 2025. “We expect the deficit in the silver market to continue throughout 2026, mainly due to increasing investment demand,” said BMI, part of Fitch Solutions, noting that strong industrial demand has further constrained physical supply to historic lows.
“The performance of precious metals is a reminder of how much uncertainty markets are facing—geopolitics, the debate over growth and rates, and now a new institutional risk driven by headlines,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore.
These comments come against the backdrop of Powell’s disclosure of a criminal investigation tied to his role in the $2.5 billion renovation of the Federal Reserve’s Washington headquarters and the testimony he provided to Congress.
Powell responded sharply, arguing that the potential indictment “should be seen in the broader context of ongoing threats and pressure from the administration” aimed at shaping central bank interest-rate decisions. Repeated attacks on the Federal Reserve by the Trump administration last year weighed on the dollar and helped fuel gold’s ascent.
Safe-haven demand has also been boosted by escalating unrest in Iran. U.S. President Donald Trump said on Sunday that he was weighing multiple options in response to developments in Iran, while again raising the prospect of seizing Greenland and questioning the value of NATO, just over a week after detaining Venezuelan leader Nicolás Maduro.
At the same time, the U.S. Supreme Court is set to rule on Trump’s tariff policy on Wednesday. A decision against the measures would strike at the core of the president’s economic agenda and represent his most significant legal setback since returning to office.
Against this backdrop, precious metals are increasingly seen as being in the midst of a structural bull market, supported by several powerful tailwinds. Falling U.S. interest rates, rising geopolitical tensions, eroding confidence in the dollar and growing challenges to the Federal Reserve’s independence have all combined to drive sustained demand. More than a dozen fund managers have indicated they have no plans to materially reduce gold exposure, underlining strong long-term conviction.
Thibaut Dorlet and Johann Mauchand, CFA Senior Multi-Asset Fund Managers, argue that gold’s expanding role within portfolios “is no longer just a hedge.” While it continues to act as an “insurance” against weakening stock-bond correlations and a more fragile geopolitical environment, they say gold is increasingly being treated as a “ real asset allocation choice .”
One of the most important structural forces behind this shift, they note, is “ central bank reallocations from the dollar to gold, ” which “are providing presumably long-lasting support, a development that is only weakly price-sensitive.” The People’s Bank of China, for example, officially holds just 7.7% of its reserves in gold. A move toward the roughly 20% average among G10 central banks would imply close to 3,300 tonnes of additional purchases — equivalent to several years of accumulation, according to Bloomberg.
The broader macroeconomic landscape “has changed profoundly,” they add. “Persistently low real rates, expansionary fiscal policies and growing questions around public debt sustainability reinforce the need to hold an asset independent of any sovereign entity. Gold is becoming a high-conviction asset and a natural balancer in portfolios.”
They also point to “the expanding access channels to gold investments,” which have “amplified these dynamics.” In particular, the rise of ETFs has made it easier for a broad range of investors — retail, private and institutional — to gain exposure to gold.
Dorlet and Mauchand conclude that “recent moves highlight a structural reallocation, rather than mere speculation, toward an asset that has become a strategic pillar. Today, gold combines two essential roles: acting as a buffer in times of stress and serving as a driver of diversification in volatile markets.” In an increasingly fragmented global environment, gold stands out as “ one of the few assets capable of offering independence from sovereign risk , resilience in times of recession , and a potentially attractive risk/return profile .”
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