Gold and silver climbed to fresh record highs on Monday as investors rushed into traditional safe-haven assets amid growing political uncertainty in the United States and ahead of a crucial week of inflation data. The rally in precious metals stood in sharp contrast to the muted performance of Bitcoin, which traded largely flat as markets reassessed risk across asset classes.
Silver led the advance, surging nearly 7% from Friday’s close to trade close to the $85 level, underscoring strong demand for defensive assets. Gold also pushed decisively higher, gaining around 2.2% on the day to set a new all-time high near $4,600. Bitcoin, by comparison, showed little direction, slipping marginally by about 0.2% over the past 24 hours, according to CoinGecko data, highlighting a clear divergence between digital assets and traditional hedges.
The catalyst behind the metals rally was an extraordinary political development involving the US Federal Reserve. The Department of Justice’s lawsuit against Federal Reserve Chair Jerome Powell has injected an unusual level of political risk into markets, raising concerns about the independence and credibility of US monetary policy. This shock prompted investors to rotate away from risk-sensitive assets and back into long-established stores of value.
Wenny Cai, chief operating officer at Synfutures, said the move reflected a classic return to safe-haven positioning as geopolitical and institutional risks intensified. She noted that the legal action against the Fed chair had heightened anxieties around central bank autonomy, driving investors towards gold and silver while leaving Bitcoin largely sidelined.
The shift in sentiment is also visible in prediction markets. On Myriad, a prediction platform owned by Decrypt’s parent company Dastan, traders are now assigning a 79% probability that gold will reach $5,000 before Ethereum hits a comparable milestone. That level of conviction has risen notably from around 70% at the start of the week, signalling growing confidence in the metals rally.
Other analysts pointed to additional macroeconomic factors reinforcing the move. Yaroslav Patsira, fractional director at CEX.IO, highlighted renewed geopolitical tensions and softer US labour market data as contributing forces. Together, these factors strengthen expectations that the Federal Reserve may begin cutting interest rates sooner than previously anticipated, a scenario that tends to favour non-yielding assets such as gold and silver.
Attention now turns squarely to upcoming US inflation data, which could determine whether the rally has further room to run. The release of the Consumer Price Index and Producer Price Index figures is expected to be pivotal. According to Patsira, any downside surprise in inflation readings would likely reinforce expectations for rate cuts, providing further support for precious metals.
Cai echoed this view, adding that weaker inflation and labour market data would bolster the case for lower rates and sustain demand for gold and silver. As markets await these figures, precious metals sit at a critical juncture, with their ability to hold record levels set to be tested by hard economic data rather than political shock alone.
