Why Are Gold and Silver Hitting Record Highs as Market Stability Wavers?

Highlights

• Gold futures jump to $3,578.40/oz, silver rallies toward $42/oz.

• Investor anxiety grows over Fed independence and political interference.

• Rate-cut expectations fuel safe-haven demand ahead of key economic data.

Gold prices soared to $3,578.40 per ounce, marking a record high, while silver approached $42 per ounce, its strongest level in over a decade. The surge underscores growing market unease as political tensions surrounding the U.S. Federal Reserve intensify. Allegations of interference in monetary policy have rattled investor confidence, prompting a flight to safe-haven assets.

The rally isn’t just technical; it reflects a broader macro narrative. Futures markets now price an 89% probability of a 25 bps Fed cut and a 30% chance of a 50 bps move at the upcoming policy meeting. Lower real yields enhance gold’s appeal, while silver benefits from its dual role as both a store of value and an industrial metal vital for renewable energy technologies.

Investor Strategy: Hedge or Bet?
Institutional portfolios are adding precious metals as systemic risk hedges. ETFs tracking gold saw inflows of $1.2 billion last week, the largest in six months. Physical bullion premiums in Asia have widened, signaling robust retail demand.

What’s Next
Watch for U.S. labor market data and Fed commentary. A dovish tilt could keep gold on an upward trajectory, while stronger data may trigger a temporary correction. Over the medium term, volatility in currencies and politics will likely sustain demand for tangible assets like gold and silver.