In 2026, gold and silver have soared to unprecedented heights, driven by increasing worries about institutional independence and geopolitical stability. In recent spot market trading, gold peaked at $4,630 per ounce, while silver hit $86.24 per ounce, before settling at $4,594 and $84.90 respectively at the time of writing.
The silver market is showcasing particularly remarkable activity, as spot prices are closely aligning with March futures contracts at $84.92. This situation, known as near-backwardation, indicates strong demand for physical silver alongside a potential supply constraint. Analysts have argued for years that paper silver instruments might have suppressed the metal’s value for over a decade, and the current pricing trends reflect growing concerns about the sufficiency of physical assets backing derivative positions.
A significant factor propelling precious metals upward is the alarming news surrounding Federal Reserve Chairman Jerome Powell, who is reportedly facing a criminal investigation by the Department of Justice. Powell has characterized the inquiry as harassment from the Trump administration, stemming from his refusal to bend to presidential pressure for interest rate cuts. The subpoena issued to the Fed chairman aligns with this narrative, particularly considering the previous attempt to remove Fed Governor Lisa Cook, a move ultimately thwarted by the Supreme Court.
Regardless of the investigation’s validity, this situation is undermining trust in the independence of U.S. monetary policy entities. The resulting uncertainty is evident in currency markets, where the dollar index slid 0.25 percent to 98.82, marking its largest decline in three weeks. Concerns about political interference in the Federal Reserve challenge a cornerstone of modern central banking and bring the dollar’s status as a reliable reserve currency into question.
Geopolitical factors are further exacerbating market anxieties. Civil unrest in Iran has entered its third week, with clashes over the weekend reportedly leading to 544 fatalities and more than 10,000 arrests. The Iranian government has issued stern warnings to both the U.S. and Israel against potential intervention, especially following President Trump’s hints at possible military actions. The risk of escalation in this strategically vital region adds another layer of geopolitical risk to precious metals valuations.
This week, market volatility may surge as several critical events occur. On Tuesday, the December Consumer Price Index and Producer Price Index reports will be released, providing updated inflation data that could impact Federal Reserve policy decisions. Then, on Wednesday, the Supreme Court is set to rule on the legality of the Trump administration’s tariff policies, a decision with far-reaching consequences for trade relations and economic growth.
Given the intersection of institutional uncertainty, geopolitical unrest, and upcoming economic indicators, investors should brace for continued fluctuations in the precious metals market. This current surge may signal the beginning of multiple record highs throughout 2026, as investors increasingly turn to safe-haven assets amid a more complex and uncertain global environment.
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Disclaimer: The views expressed in this article are those of the author and may not necessarily reflect those of Kitco Metals Inc. The author has endeavored to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article serves strictly for informational purposes and does not constitute a solicitation to engage in any transactions involving commodities, securities, or other financial instruments. Kitco Metals Inc. and the author of this article disclaim any liability for losses and/or damages arising from the use of this publication.
