Gold and silver surged to record levels on Monday as investors sought refuge in traditional safe-haven assets amid rising political uncertainty in the United States and ahead of a pivotal week for inflation data.
Silver led the rally, jumping nearly 7% from Friday’s close to trade close to $85, while gold climbed 2.2% to set a new all-time high at $4,600. Bitcoin, by contrast, remained largely unchanged, posting a modest 0.2% decline over the past 24 hours, according to data from CoinGecko.
The sharp move in precious metals comes against the backdrop of an unprecedented political confrontation involving the U.S. Federal Reserve. Markets were rattled by reports that the U.S. Department of Justice has filed a lawsuit against Federal Reserve Chair Jerome Powell, reigniting concerns over the independence of U.S. monetary policy and prompting a broader pullback from risk assets.
As uncertainty intensified, investors gravitated toward gold and silver, assets traditionally viewed as stores of value during periods of political and economic stress. Winnie Cai, chief operating officer at derivatives platform Synfutures, said the rally reflects a renewed flight to safety. She noted that rising geopolitical risk and doubts surrounding the credibility of U.S. monetary policy have introduced “unusual political risk,” pushing investors toward precious metals.
Market sentiment has also shifted noticeably in forward-looking indicators. On prediction platform Myriad, users now assign a 79% probability that gold will reach $5,000 before Ethereum hits the same price level, up from 70% at the start of the week. The shift highlights growing confidence that gold’s momentum may extend further in the near term.
Yaroslav Patsira, regional manager at crypto exchange CEX.IO, echoed that view, pointing to a combination of geopolitical tensions and weakening labor market data as supportive factors. In comments to Decrypt, he said these conditions strengthen expectations for interest rate cuts, which typically benefit non-yielding assets such as gold and silver.
Attention now turns to key U.S. inflation readings scheduled for release this week, including the Consumer Price Index (CPI) and Producer Price Index (PPI) data due on Tuesday. These figures are expected to play a critical role in determining whether the rally in precious metals can be sustained.
Patsira said inflation data will be the dominant driver in the near term, warning that downside surprises could reinforce expectations for monetary easing and provide further support for gold and silver prices. Cai shared a similar outlook, adding that softer inflation and continued weakness in the labor market would likely strengthen the case for future rate cuts.
While gold and silver have reasserted their roles as traditional safe havens, the implications extend beyond metals. The crypto market, and Bitcoin in particular, remains caught between its identity as a high-risk asset and its long-standing narrative as an alternative hedge. Although Bitcoin has so far lagged the metals rally, persistent monetary uncertainty and renewed doubts over central bank independence could revive interest in digital assets as a complementary store of value.
As investors navigate an increasingly volatile global landscape, the relationship between precious metals and cryptocurrencies may prove less competitive than complementary. Rather than a zero-sum contest, the simultaneous demand for both asset classes may signal a deeper shift in investor behavior, one that favors diversification as a means of preserving value in a world marked by political and economic instability.
