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Gold prices surge to fresh high over concerns about Iran crisis and Fed independence - YAHOO FINANCE
Gold (GC=F)
Gold prices hit a fresh high on Monday morning, as concerns about geopolitical uncertainty and the independence of the US Federal Reserve fuelled safe-haven demand.
Gold futures (GC=F) jumped 2% to $4,592.90 per ounce at the time of writing, while spot gold surged 1.6% to $4,582.55.
Hundreds have reportedly been killed in anti-government protests in Iran, as the nationwide demonstrations enter a third week. President Donald Trump said on Sunday that the US was considering "some very strong options" in Iran.
In addition to heightened geopolitical tensions, there are also growing concerns about the independence of the US central bank, with the news that a criminal probe had been opened into Fed chair Jerome Powell.
Powell revealed on Sunday that that the Justice Department served the central bank with grand jury subpoenas, threatening a criminal indictment related to Powell’s testimony before the US Senate.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said in a recorded video.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said that a "a cocktail of geopolitical tension and questions over Federal Reserve independence sent investors flocking to safety".
"Escalating rhetoric between Iran and the US, alongside revelations that chair Powell faced threats from the White House over past decisions, heightened the sense of political risk," he said. "A softer US jobs print on Friday added fuel to the gold trade, with traders leaning into expectations of two rate cuts this year ahead of a pivotal inflation report later this week."
