Spot gold rose 1.3% to $4,566.80 per ounce by 0410 GMT, after touching a record high of $4,600.33 earlier in the session. U.S. gold futures for February delivery gained 1.8% to $4,579.10, News.Az reports, citing Reuters.
“So, between events in Iran, and potential U.S. involvement, and the (Fed) chair being the focus of a criminal probe… U.S. futures turned lower on the Powell news, which was a green light for gold to take a run higher,” said Tim Waterer, chief market analyst at KCM Trade.
Unrest in Iran has resulted in more than 500 deaths, according to a rights group on Sunday, as Tehran warned it could target U.S. military bases if President Donald Trump follows through on renewed threats to strike the country in support of protesters.
The turmoil in Iran comes as Trump has taken an increasingly assertive stance abroad, having ousted Venezuelan President Nicolas Maduro and publicly discussed acquiring Greenland either through purchase or by force.
Powell said on Sunday that the Trump administration had threatened him with a criminal indictment over his testimony to Congress, a move he described as a “pretext” designed to apply additional pressure on the central bank to cut interest rates. The comments sent the U.S. dollar and U.S. equity futures lower.
Investors are currently pricing in at least two Federal Reserve rate cuts this year. Non-yielding assets such as gold typically perform well in low-interest-rate environments and during periods of geopolitical or economic uncertainty.
“I expect that central bank appetite for gold and silver will continue to grow this year, with precious metals perceived as being a lower risk alternative to the dollar,” Waterer said.
Spot silver jumped 4.1% to $83.20 per ounce after hitting an all-time high of $83.96 earlier in the day.
Spot platinum rose 3.4% to $2,349.59 per ounce, having previously reached a record high of $2,478.50 on December 29. Palladium also advanced 3.4% to $1,877.96 per ounce.
