Gold prices reached a record high during Monday’s Asian trading after United States President Donald Trump escalated attacks on the Federal Reserve’s independence and amid increased geopolitical uncertainty in Iran.
Spot gold was up 1.8% to US$4,572.76 per ounce by 2:55 pm AEDT (3:55 am GMT), having hit fresh highs of $4,592.64 earlier in the session. Silver increased 4.9% to $83.46.
The U.S. Department of Justice has launched a criminal investigation into the Fed and its chair Jerome Powell, Powell said today. The probe is reportedly examining whether Powell lied to Congress during testimony about the renovation of the Fed’s office buildings.
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” said Powell. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions or whether instead monetary policy will be directed by political pressure or intimidation.”
Trump has repeatedly called for aggressive rate cuts, and has previously threatened to fire Powell for not doing so. He also attempted to fire Fed governor Lisa Cook over unverified mortgage fraud allegations last year.
This follows weaker-than-expected payrolls data for December, with the U.S. adding just 50,000 jobs that month. Traders forecast a 95% probability that rates will remain unchanged at the Fed’s next meeting in late January, according to CME FedWatch.
Gold prices were also boosted by demand for safe-haven assets as protests against Iran’s government continue. At least 544 people have been killed in Iran , including 483 protesters, per the Human Rights Activists News Agency.
U.S. officials are weighing options including aerial strikes and cyberattacks against Iranian military targets, the Wall Street Journal reported.
Iran’s government has told the U.S. not to attack, saying Iran could then target U.S. and Israel military and logistics centres.
