Gold and silver continue to print new all-time highs as geopolitics and President Trump’s spat with Fed Chair Powell boost safe haven demand.
As protests in Iran enter their third week, US President Donald Trump weighs all options, including cyber-attacks and military action, according to a recent Associated Press article.
“The military is looking at it, and we’re looking at some very strong options,” Trump tells reporters on Air Force One on Sunday night. Asked about Iran’s threats of retaliation, he says: “If they do that, we will hit them at levels that they’ve never been hit before.”
The US President is also at loggerheads with the central bank after Fed Chair Jerome Powell confirmed that he and the central bank are now under investigation by the Department of Justice over the soaring cost of the central bank’s renovation. Chair Powell describes the investigation as politically motivated, pointing to Trump’s repeated threats to remove him for not lowering interest rates faster. The latest CME FedWatch data disappoints Trump, with the market pricing in just a 5% probability of a rate cut at the January 28th meeting.
Against this volatile background, and with investors moving away from the US dollar, demand for safe-haven assets continues. Gold and silver made fresh ATHs today – gold at $4,601/oz, silver at $84.60/oz – and look set to push higher over the coming weeks. Both metals close in on important ‘big figures’ at $5,000/oz and $100/oz, respectively. These levels act as important reference points for investors and will likely spark a new round of volatility. For longer-term investors, any sell-off from these levels provides a renewed opportunity to enter the market.
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