Precious Metals Rally: Gold Surges Beyond US$4,600 While Silver Hits Record Peak Above US$86

A historic surge continues in the precious metals market, with gold and silver both smashing through previous records this week. On January 12, 2026, gold spot price climbed to US$4,630.01 per ounce, while silver simultaneously reached an all-time high of US$86.06 per ounce—a dramatic ascent from where these markets stood just months earlier.

The Gold Price Trajectory: From US$2,640 to Record Heights

The yellow metal’s remarkable journey throughout 2025 reveals the magnitude of this bull run. Starting the year near US$2,640, gold systematically climbed, reaching US$3,200 by April before consolidating through summer. The real acceleration kicked in mid-October when it decisively broke through the US$4,300 barrier. While pullbacks occurred—including a temporary dip below US$4,000—neither the magnitude nor duration matched analyst expectations. By late November, momentum resumed, and the rally intensified sharply in December. When compared historically to the gold price in 2007, which hovered around US$800 per ounce, the current valuations represent an extraordinary multi-year advance driven by entirely different market dynamics.

Why the Rally Is Accelerating Now

Multiple factors are converging to fuel this sustained advance. Geopolitical tensions and persistent economic uncertainty globally have made gold the defensive asset of choice. Additionally, expectations of easier monetary policy—particularly following Jerome Powell’s upcoming departure as Federal Reserve Chair later this year—have supported prices. The Fed’s interest rate cuts provided a tailwind, though recent political developments have injected fresh volatility into the equation.

The Political Dimension: Fed Independence Under Pressure

A significant backdrop to current precious metals strength involves unprecedented tension between the Trump administration and the Federal Reserve. On January 9, the U.S. Department of Justice served the Fed with criminal grand jury subpoenas targeting Powell, ostensibly related to a 2025 Senate Banking Committee testimony concerning a renovation project. However, Powell’s official statement indicated the investigation stems from the administration’s pressure on the Fed to cut rates, characterizing it as an attempt to compromise the central bank’s independence.

This extraordinary development has rattled markets. Analysts worldwide have noted that questioning Fed autonomy threatens the institution’s credibility as an inflation-fighting authority. Should monetary policy become subject to political influence rather than economic data, several consequences could ripple through markets: the dollar’s appeal as a neutral reserve currency diminishes, investor confidence in U.S. bonds potentially weakens, and demand for alternative safe-haven assets like gold intensifies.

Market Reactions and Broader Implications

Financial strategists point out that under normal circumstances, recent U.S. employment and inflation data would warrant the Fed holding rates steady. However, if political pressure overrides data-driven decision-making and inflation resurfaces, investors logically migrate toward inflation hedges: precious metals rank prominently alongside commodities, inflation-linked bonds, and dividend stocks.

The uncertainty surrounding Fed independence simultaneously pressures the U.S. dollar. A weakened dollar makes gold—priced in dollars globally—more attractive to international buyers. Additionally, concerns about record American debt exceeding US$38 trillion are prompting investors to question long-term dollar stability, further boosting safe-haven demand.

Broader Precious Metals Complex

Beyond gold and silver, platinum approached record highs on Monday at US$2,360.50 per ounce. Palladium, while below its peak, remained elevated above US$1,900 per ounce. Silver’s dual nature as both investment metal and critical industrial component—essential for solar panel technology and other applications—continues supporting its price action.

The precious metals complex is further bolstered by strong central bank purchases, particularly from major Eastern nations diversifying away from dollar-denominated reserves. These institutional buyers provide a structural floor beneath prices, ensuring volatility has contained downside risks relative to potential upside.

As geopolitical risk persists and questions about monetary policy autonomy linger, expect this defensive positioning to remain in place, continuing to support both gold and silver at elevated levels throughout the coming months.