Gold Surges to Record High as Powell Probe Revives Concerns About Fed Independence

Core Insights - Gold prices reached a record high of $4,640 per ounce, driven by investor concerns regarding the Federal Reserve's independence amid a criminal investigation into Fed Chair Jerome Powell [1][3][8] - The investigation by the Justice Department is perceived as a political maneuver to pressure the Fed into lowering interest rates, which could undermine the legitimacy of U.S. monetary policy [2][5][8] Gold Market Dynamics - Gold futures increased nearly 2.7% to $4,625 per ounce, following a more than 4% rally the previous week, influenced by persistent inflation concerns and expectations of further interest rate cuts by the Fed [3][4] - The rise in gold prices reflects a trend where investors seek safe-haven assets during economic uncertainty, particularly when the independence of the Federal Reserve is questioned [5][8] Federal Reserve Context - The Federal Reserve has faced political pressure, with Powell asserting that interest rate decisions should be based on public interest rather than presidential preferences [2][3] - The Fed has cut interest rates in response to labor market weaknesses, but there is a division among policymakers regarding future rate cuts, especially with inflation remaining above the 2% target [7]