PRECIOUS-Gold edges past $4,600/oz as Powell-Trump rift stokes safe-haven demand
Gold prices surpassed $4,600 per ounce for the first time, driven by increased safe-haven demand amid geopolitical tensions and a criminal probe into Federal Reserve Chair Jerome Powell. Spot gold rose 1.3% to $4,566.80, while silver reached a record high of $83.96. The unrest in Iran and potential U.S. military involvement contributed to market volatility, leading investors to expect at least two Fed rate cuts this year. Analysts predict continued central bank interest in gold and silver as safer alternatives to the dollar.
Gold breaks through $4,600/oz for first time
Silver hits record high at $83.96/oz
US, Iran threaten strikes after Iranian protest breakout
(Updates for Asia hours trading)
By Ishaan Arora
Jan 12 (Reuters) - Gold broke through $4,600/ounce for the first time on Monday, while silver also hit a record high, as investors snapped up safe havens due to heightened geopolitical uncertainties and a criminal probe into Federal Reserve Chair Jerome Powell.
Spot gold (XAU=) jumped 1.3% to $4,566.80 per ounce by 0410 GMT. Bullion hit a record high of $4,600.33 earlier in the day.
U.S. gold futures (GCcv1) for February delivery firmed 1.8% to $4,579.10.
“So, between events in Iran, and potential U.S. involvement, and the (Fed) chair being the focus of a criminal probe… U.S. futures turned lower on the Powell news, which was a green light for gold to take a run higher,” said Tim Waterer, KCM Trade’s chief market analyst.
Unrest in Iran has killed more than 500 people, a rights group said on Sunday, as Tehran threatened to target U.S. military bases if President Donald Trump carries out his renewed threats to strike the country on behalf of protesters.
Iran’s unrest comes as Trump flexes U.S. muscles internationally, having ousted Venezuelan President Nicolas Maduro, and discussing acquiring Greenland by purchase or force.
Powell said on Sunday the Trump administration had threatened him with a criminal indictment over Congressional testimony, an action Powell called a “pretext” aimed at putting further pressure on the central bank to lower rates. This sent the dollar and U.S. equity futures lower. (MKTS/GLOB) (FRX/)
Investors currently expect at least two Fed rate cuts this year. (FEDWATCH)
Non-yielding assets tend to do well in a low-interest-rate environment and during geopolitical or economic uncertainties.
“I expect that central bank appetite for gold and silver will continue to grow this year, with precious metals perceived as being a lower risk alternative to the dollar,” Waterer said.
Spot silver (XAG=) was up 4.1% at $83.20 per ounce, after hitting an all-time high of $83.96 earlier in the day.
Spot platinum (XPT=) climbed 3.4% to $2,349.59 per ounce after scaling a record high of $2,478.50 on December 29.
Palladium (XPD=) gained 3.4% to $1,877.96 per ounce.