Gold surged to a fresh record high, with Silver following close behind, as markets reassessed political risk around US monetary policy. The 4,685 projection firmly within reach for Gold, and break of which would pave the way to 5,000 psychological level and above.
Additionally, after a year of Silver leadership, momentum may now be shifting back toward Gold, a shift consistent with rising concern over institutional credibility rather than cyclical reflation.
The immediate catalyst came US prosecutors launched on Friday a criminal investigation into Fed Chair Jay Powell. The development jolted markets, reviving concerns that the central bank could face increasing political interference at a time when policy credibility remains critical.
The episode is widely seen as the latest salvo from the Donald Trump administration against the Fed. The central bank has been under sustained pressure to ease policy faster, even as policymakers remain wary of reigniting price pressures or undermining hard-won inflation progress.
Powell, in a statement released Sunday, confirmed that the Fed had received grand jury subpoenas and a threat of criminal indictment from the Justice Department. The matter relates to his testimony before Congress concerning a USD 2.5B renovation of the Fed’s headquarters, though Powell framed the move in a much broader political context.
He warned that the action should be seen against a backdrop of ongoing threats and pressure aimed at forcing lower interest rates and securing greater political control over monetary policy. He said bluntly, “this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure”.
Technically, Gold’s up trend resumed and it’s now on track to 61.8% projection of 3,267.90 to 4,381.22 from 3,997.73 at 4,685.76. Decisive break there will pave the way to 5,000 psychological level, and possible further to 100% projection at 5,111.05. Outlook will stay bullish as long as 4,381.22 resistance turned support holds, in case of retreat.
Silver is also trying to resume its long term up trend. Sustained trading above 83.94 resistance will pave the way to 261.8% projection of 36.93 to 54.44 from 48.50 at 94.34. Nevertheless, break of 73.80 will bring another pullback first.
