Gold prices surged to a fresh all-time high above $4,600 per ounce on Monday, while silver jumped to around $85.24 per ounce, as investors rushed into precious metals following an extraordinary escalation in tensions between US President Donald Trump and Federal Reserve Chair Jerome Powell. The simultaneous rally in both metals highlighted a broad-based flight to safety rather than a narrow move limited to gold alone.
Market anxiety intensified after Powell confirmed that the US Department of Justice had served the Federal Reserve with criminal indictments linked to his congressional testimony on renovation works at the Fed’s headquarters.
Powell described the move as unprecedented and suggested it should be viewed in the wider context of sustained political pressure on the central bank. Investors quickly interpreted the development as a threat to the independence of US monetary policy, triggering sharp moves across safe-haven assets. BBC Economics Editor Faisal Islam, noted that Powell’s public response is what marked an extraordinary moment for global markets.
Trump–Powell Standoff Raises Alarm Over Fed Independence
The confrontation between Trump and Powell has been building for months, largely centred on interest rate policy. Trump has repeatedly pushed for aggressive rate cuts, while Powell has defended the Fed’s mandate to set policy based on economic data rather than political preference as reported by Reuters.
The latest escalation marks a significant shift. Powell openly suggested that the legal action was being used as leverage to influence monetary policy, a claim that rattled markets already sensitive to institutional credibility.
For many investors, the episode echoes experiences in emerging economies ie Turkey and Zimbabwe where political interference in central banks has historically led to currency instability and capital flight.
As a result, confidence in traditional financial anchors weakened, driving demand for assets perceived as politically neutral stores of value.
Silver Strength Confirms Broad Precious Metals Demand
Silver’s (XAGUSD) surge to $85.24 reinforced the bullish tone across the precious metals complex. Unlike gold, which is primarily viewed as a financial hedge, silver also carries strong industrial demand, making its rally particularly notable.
The narrowing gold-to-silver ratio suggests that investors are increasingly willing to take exposure across the metals spectrum rather than concentrating solely on gold. This dynamic often appears during periods of heightened uncertainty, when inflation hedging, geopolitical risk, and concerns over monetary credibility converge.
Market participants note that silver’s percentage gains continue to outpace gold’s, indicating growing speculative and strategic interest in the metal.
Gold Technical Analysis: Key Support and Resistance Levels
- Current trading zone: $4,580–$4,620
- Immediate resistance: $4,650
- Major support: $4,400 (20-day moving average)
- Secondary support: $4,225 (prior consolidation zone)
From a technical standpoint, gold remains firmly in a well-established uptrend. Prices are holding above the 20-day moving average and tracking along the upper Bollinger Band, signalling strong momentum rather than exhaustion. The MACD remains positive and elevated, supporting further upside as long as key support levels remain intact.
What the Precious Metals Rally Signals
The latest surge in gold and silver reflects deeper concerns about political risk and institutional stability in the US. With expectations growing for additional interest rate cuts later this year and trust in policy independence being questioned, non-yielding assets have regained prominence in portfolios.
Silver’s participation strengthens the narrative that this is not a short-lived headline reaction, but a broader repricing of risk. While short-term volatility is likely after such a sharp move, the underlying demand backdrop for precious metals remains supportive.
Writer’s Trade Idea: My preferred strategy is to buy gold on pullbacks toward $4,500, targeting $4,800, while placing a stop-loss below $4,400.
Both metals surged as political pressure on the Federal Reserve raised concerns about monetary policy independence, prompting a flight to safe-haven assets.
Silver benefits from both safe-haven demand and industrial use, allowing it to post stronger percentage gains during periods of heightened uncertainty.
For gold, support lies at $4,400 and $4,225, with resistance near $4,650. Silver traders are watching whether prices can sustain moves above $85.