Gold prices surged to a historic peak on Monday as the U.S. dollar weakened sharply, following heightened political pressure on the Federal Reserve that unsettled global financial markets and pushed investors toward traditional safe-haven assets.
In early trading, spot gold climbed to an all-time high, extending a strong rally that has gathered pace in recent weeks. The precious metal benefited from a broad decline in the dollar and falling U.S. Treasury yields, as investors reassessed confidence in U.S. monetary policy and the independence of the central bank.
Market analysts said the latest move was triggered by reports that U.S. authorities were intensifying scrutiny of the Federal Reserve, a development that has reignited concerns about political interference in monetary policy decisions. Those fears have weighed heavily on the dollar, while boosting demand for assets perceived as stable stores of value.
The dollar slipped against a basket of major currencies, making gold cheaper for holders of other currencies and adding further momentum to the rally. At the same time, U.S. Treasury yields eased, reducing the opportunity cost of holding non-interest-bearing assets such as gold.
Traders noted that gold’s rise reflects more than short-term speculation. Uncertainty over the future direction of U.S. interest rates, coupled with persistent geopolitical risks and global economic fragility, has strengthened gold’s appeal as a hedge against volatility. Expectations that the Federal Reserve could face increased pressure to cut rates sooner than anticipated have also supported bullion prices.
Silver prices followed a similar upward trend, although gains were more modest compared to gold. Other precious metals showed mixed movement as investors concentrated primarily on gold as the preferred safe haven during periods of heightened uncertainty.
Global equity markets reacted cautiously to the developments. While some Asian and European stocks held steady, U.S. futures edged lower, reflecting investor unease over the implications of political pressure on the central bank and its potential impact on financial stability.
Financial experts warned that sustained doubts about the Federal Reserve’s independence could have longer-term consequences for global markets. The credibility of the Fed has historically underpinned confidence in the dollar and U.S. assets, and any erosion of that trust may continue to drive capital toward alternatives such as gold.
As markets digest the unfolding situation, attention remains firmly fixed on Washington and the Federal Reserve. For now, gold’s record-breaking run underscores a clear message from investors: in times of policy uncertainty and weakening confidence in major currencies, safe-haven assets regain center stage.
