Gold prices pushed to new record levels in Asian trading on Wednesday after subdued U.S. inflation data strengthened expectations that the Federal Reserve will cut interest rates this year, while escalating tensions in Iran supported demand for safe-haven assets.
Spot gold jumped more than 1% to an all-time high of $4,640.13 an ounce by 01:56 ET (06:56 GMT), eclipsing the prior record of $4,634.33/oz set in the previous session. U.S. Gold Futures for March also gained 1%, reaching $4,643.10/oz.
Silver outpaced other precious metals, surging more than 4% to a fresh record of $91.56/oz. The rally has been driven by a combination of robust industrial demand and increased safe-haven buying. Platinum also advanced sharply, rising as much as 4% to $2,444.21, bringing it close to the record highs seen last month.
Soft U.S. CPI and Iran tensions lift bullion
U.S. consumer price index figures released on Tuesday came in below market expectations. Core CPI increased by 0.2% in December and 2.6% year on year, undershooting forecasts and reinforcing expectations for future interest rate cuts. Markets are now pricing in around two rate reductions in 2026.
“Two Fed rate cuts seem perfectly achievable with the risks skewed towards a third due to the cooling jobs story,” ING analysts said in a recent note.
Lower interest rates typically support non-yielding assets such as gold by reducing their opportunity cost.
Geopolitical concerns also remained elevated. Iran has been rocked by intensifying anti-government protests that have reportedly resulted in around 2,000 deaths, fuelling fears of broader instability across the Middle East.
The unrest has drawn warnings from U.S. President Donald Trump, who cautioned about potential military action and threatened to impose a 25% tariff on countries doing business with Iran. Trump also urged protesters to step up pressure on Iran’s leadership, writing on social media that they should “take over your institutions” and that “help is on its way.”
Fed independence concerns add support
Gold prices also found support from renewed concerns over the independence of the U.S. central bank, after the Trump administration opened a criminal investigation involving Federal Reserve Chair Jerome Powell.
While the move unsettled markets, central bank leaders and senior banking executives publicly voiced support for Powell, underlining the importance of safeguarding the Fed’s independence from political influence.
Elsewhere in metals markets, benchmark copper futures on the London Metal Exchange edged up 0.4% to $12,237.20 a tonne, while U.S. copper futures climbed 1.1% to $6.07 a pound. Palladium prices also advanced strongly, rising as much as 4% to $1,911.23/oz.