Bloomberg
(Bloomberg) — Gold eased from a record high as traders assessed the path of US interest rates after an inflation reading came in weaker than expected and the Trump administration renewed attacks on the Federal Reserve. Silver topped $89 an ounce before paring some of the advance.
Bullion traded just above $4,600 an ounce after earlier surging to a fresh peak of $4,634.55. The dollar rose further after underlying US inflation in December was not as high as feared, supporting the case for the Fed to lower interest rates later in the year. Swap traders continued to all-but-fully price in a Fed rate cut by the June policy meeting, with some chance of an earlier move but minimal odds of action at the Jan. 28 meeting.
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While further interest rate easing later in the year would be positive for non-yielding gold, a stronger greenback weighed on the yellow metal as it’s priced in the US currency.
Still, the precious metal is supported by haven demand following an escalation of attacks on the Fed by the White House, which has opened a probe into the central bank’s headquarters renovation. President Donald Trump has said repeatedly he wants to fire Fed Chair Jerome Powell before the chair’s term ends in May.
The attacks helped propel gold to successive record highs last year, along with heightened trade and geopolitical risks and central-bank buying. Precious metals are carrying that momentum through to 2026.
“With just one day left of the annual commodity index rebalancing, the market’s strength during what should have been a period of mechanical selling is striking. Gold and silver absorbing that supply without flinching is sending a powerful signal to investors and reinforcing the sense that, for now, the bull train still has further to run,” said Ole Hansen, a strategist at Saxo Bank A/S.
Once a year, the Bloomberg Commodity Index, a widely tracked benchmark for a basket of commodities, resets its weights. The 5-day roll period started Thursday.
Silver climbed to $89.119 an all-time high before giving up some of the gains to trade just above $87. The white metal is building strength from a 148% rally from 2025 that was driven by a historic short squeeze and a speculative frenzy.
“A large share of the activity is being driven by speculative flows, particularly momentum-oriented traders who chase strength on the way up but are equally quick to cut exposure when prices turn,” according to Hansen.
Citigroup Inc. forecasts gold will reach $5,000 an ounce and silver will get to $100 an ounce in the next three months.
“We expect the bull market to stay intact in the near term,” Citi analysts said in a note. “Our base case is for eventually moderating geopolitical risks to weigh on hedging demand for precious metals later in the year, particularly on gold.”
Meanwhile, CME Group will change the way it sets margins for gold, silver, platinum and palladium futures after the surge in prices and volatile trading. The approach will be based on a percentage of so-called notional — compared with a dollar amount basis previously — and will take effect from Tuesday’s close.
The US exchange also announced Tuesday the forthcoming launch of a 100-ounce silver contract to facilitate greater participation from retail investors.
Spot gold slipped 0.1% to $4,592.93 an ounce as of 3:11 p.m. in New York. The Bloomberg Dollar Spot Index was up 0.1%. Silver climbed 2.4%. Platinum edged higher while palladium also fell.
–With assistance from Yihui Xie and Preeti Soni.
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