Gold, silver futures soar to fresh lifetime highs on Fed probe, geopolitical tensions; check key details

Gold and silver futures soared to fresh highs in both domestic and international markets on Monday, January 12, as the precious metals' safe-haven demand surged amid rising geopolitical tensions and the US Federal Reserve probe.

Gold futures for February expiry advanced 1.85% to a lifetime high of ₹1,41,388 per 10 gram on the Multi Commodity Exchange (MCX).

Meanwhile, silver futures for March delivery jumped 5% on the MCX to surpass the ₹2.65 lakh per kg mark, rising to an all-time high of ₹2,65,390 per kg.

In the international markets, gold futures for February delivery on the Comex grew by $111.8, or 2.5%, to hit a fresh all-time high of $4,612.7 per ounce. Silver futures contracts for March expiry surged by $4.56, or 5.8%, to touch a lifetime high of $83.90 per ounce.

Why are gold and silver rising?

Gold and silver, as safe-haven metals, rise during uncertain situations like heightened geopolitical tensions and market volatility, along with weak currencies.

On Sunday, US Federal Reserve Chair Jerome Powell said the Department of Justice has served the central bank with subpoenas, threatening it with a criminal indictment over his June testimony about the Fed's $2.5-billion renovation of two office buildings. US President Donald Trump had also called the renovation project excessive.

According to market experts, the rally in gold and silver prices on Monday was driven by deepening unease surrounding the Federal Reserve after the US Federal prosecutors launched a criminal investigation into Chair Powell over the central bank's renovation of its Washington headquarters, a PTI report said.

The Fed probe comes amid rising tensions between the White House and the Fed. In recent times, President Trump has criticised the Fed many times for not cutting interest rates as sharply as he prefers.

Analysts said the probe has intensified concerns over the Fed's independence, raising doubts about the stability of US monetary policy, the PTI report said. The instability has resulted in investors rushing to safer assets such as gold and silver.

The dollar index, which measures the strength of the greenback against a basket of six currencies, was trading lower at 99.03, supporting bullion prices further.

Rising geopolitical tensions, especially as President Trump is considering military action against Iran following violent anti-government protests, have also been boosting the precious metals.

Meanwhile, the United Nations has called an emergency meeting after Russia allegedly deployed a new ballistic missile in a large-scale strike on Ukraine.

A weakening dollar, combined with these developments, has fuelled uncertainty in the overseas markets. Investors are seeking refuge in safe-haven metals as a hedge against uncertainty.