A mix of political tension and macroeconomic uncertainty, compounded by the investigation involving Jerome Powell, has driven gold to unprecedented levels, with prices breaking above $4,600 an ounce for the first time. Spot gold climbed to $4,601.17 earlier today, while futures reached $4,612.40 an ounce.
Silver has also continued its powerful advance, hitting new all-time highs at 84.653 dollars an ounce on the spot market. The white metal surged by nearly 150% in 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 tightened physical supply to record levels.
“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.
The comment reflects Powell’s disclosure of a criminal investigation related to his role in the $2.5 billion renovation of the Federal Reserve’s headquarters in Washington, D.C., and the associated testimony he delivered to Congress.
Powell responded forcefully, arguing that the potential indictment “should be seen in the broader context of ongoing threats and pressure from the administration” aimed at influencing the central bank’s interest-rate decisions. Repeated criticism of the Fed by the Trump administration last year has already weighed on the U.S. dollar and supported gold’s rally.
Heightened geopolitical risk has added to demand for safe-haven assets. Protests in Iran have intensified, while U.S. President Donald Trump said yesterday that he was considering a range of options regarding Iran. He also reiterated threats to seize Greenland and questioned the value of the NATO alliance, just over a week after detaining Venezuelan leader Nicolás Maduro.
At the same time, the U.S. Supreme Court is due to issue a decision on Trump’s tariff policy on Wednesday. A ruling against the measures would strike at the core of the president’s economic agenda and mark his most significant legal setback since returning to the White House.
Precious metals are now at the heart of what many see as a powerful structural rally, underpinned by multiple long-term drivers. These include falling U.S. interest rates, rising geopolitical tensions, eroding confidence in the dollar, and challenges to the Federal Reserve’s independence. More than a dozen fund managers have said they do not plan to meaningfully reduce gold holdings, underscoring strong conviction in its long-term appeal.
Thibaut Dorlet and Johann Mauchand, CFA Senior Multi-Asset Fund Managers, argue that gold’s growing role in portfolios “is no longer just a hedge.” While it continues to act as an “insurance” against weakening stock-bond correlations and heightened geopolitical risk, they say gold is increasingly emerging as a “ real asset allocation choice .”
Among the key structural forces behind this shift are “ central bank reallocations from the dollar to gold, ” which they say “are providing presumably long-lasting support, a development that is only weakly price-sensitive.” They point to the People’s Bank of China, which officially holds just 7.7% of its reserves in gold. A move toward the roughly 20% average seen among G10 central banks would imply nearly 3,300 tonnes of additional buying, equivalent to several years of accumulation, according to Bloomberg.
The broader macro backdrop “has changed profoundly,” they add, with “persistently low real rates, expansionary fiscal policies, and growing questions about the sustainability of public debt” strengthening the case for holding assets detached from sovereign risk. In this environment, “Gold is becoming a high-conviction asset and a natural balancer in portfolios ,” they say.
They also highlight “the expanding access channels to gold investments,” which has “amplified these dynamics.” In particular, the growth of ETFs has enabled a wider range of investors — retail, private and institutional — to gain exposure to gold with ease.
Dorlet and Mauchand conclude that “recent movements highlight a structural reallocation, rather than mere speculation, towards an asset that has become a strategic pillar. Today, gold combines two essential functions: that of a buffer in times of stress and that of a driver of diversification in volatile markets.” In an increasingly fragmented global landscape, 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 ,” they say.