Gold Hits Record High Amid Fed Tensions and Iran Unrest

Introduction: Golds Unprecedented Surge

According to Bloomberg, Gold surged to nearly $4,600 an ounce amid rising tensions between the US Justice Department and the Federal Reserve. Fed Chair Jerome Powell confirmed that the central bank received grand jury subpoenas related to his June congressional testimony on headquarters renovations. This escalation in President Trump‘s longstanding feud with Powell raised concerns about the Fed’s independence. Gold, as a traditional safe-haven asset, reacted sharply, reflecting investor worries over institutional risk and macroeconomic uncertainty.

Geopolitical Drivers Behind Gold

Deadly protests in Iran intensified geopolitical tensions, introducing uncertainty into global markets. The possibility of regime change increased risk perceptions, driving investors toward Gold as protection. Trumps statements regarding Iran, Greenland, and recent actions in Venezuela added to concerns, amplifying demand for Gold as a safe-haven asset.

Safe-Haven Demand and Investor Behavior

Charu Chanana, a strategist at Saxo Markets, noted that geopolitical risk, economic uncertainty, and headline-driven volatility created an institutional risk premium, benefiting Gold. Investors are navigating multiple sources of volatility, including interest rate expectations, prompting continued allocation to Gold. Even after a record-setting year, many fund managers maintain strong conviction in its long-term value.

US Economic Data and Monetary Policy Influence

The US jobs report showed growth of 50,000 positions, below forecasts of 64,000, maintaining expectations for further Fed rate cuts. As non-yielding assets, Gold and silver benefit from low interest rates, which reduce the opportunity cost of holding precious metals. Futures markets anticipate at least two additional rate cuts in 2026, supporting demand for Gold.

Gold Performance Metrics

Gold rose 1.77% to $4,585.39 an ounce (Singapore time).

Silver increased 4.6% after a near 10% surge the previous week.

Palladium and platinum also advanced amid safe-haven demand.

The Bloomberg Dollar Spot Index dipped 0.2%, reflecting weaker US dollar sentiment due to Fed uncertainties and global pressures. These dynamics highlight the link between currency volatility and Gold performance.

Historical Context: Gold as a Crisis Hedge

Over the past decade, Gold has repeatedly proven its value as a crisis hedge, rising in financial recessions and geopolitical shocks. The combination of Fed legal pressure and Iran unrest illustrates why Gold continues to attract global attention.

Gold and Market Psychology

Gold reflects investor fear and uncertainty. Headline-driven news has increased its appeal, signaling the premium investors are willing to pay for safety. Bloomberg notes that even after a record year in 2025, many investors retained positions, viewing Gold as a long-term store of value rather than a speculative tool.

Oil Market and Gold Correlation

Iran unrest affects oil markets, introducing volatility that supports Gold. Supply concerns and monetary policy expectations create a feedback loop that bolsters safe-haven demand for Gold.

Institutional Risk Premium

The Fed subpoena and potential political pressure introduced an institutional risk premium. Golds price surge signals market concern over whether monetary policy will remain evidence-based or be swayed by politics.

Conclusion: Gold at the Intersection of Politics and Economics

Gold reached record highs in response to Fed-related political uncertainty and escalating geopolitical tensions in Iran. According to Bloomberg, the rally demonstrates Golds role as a protective asset amid complex global dynamics. Investors should remain aware of monetary policy, geopolitical developments, and institutional credibility, as Gold reflects broader market risk and uncertainty.