Gold hits record high then adjusts... supported by concerns over Fed independence and geopolitical tensions

Source: BlockMedia Original Title: Gold Hits Record High Again…$4620 Then Pauses for Breath Original Link: International gold prices approached the $4620 per ounce mark intraday, reaching a new all-time high, but later profit-taking sales emerged, partially retreating the gains. Amid concerns over the erosion of Federal Reserve independence and ongoing geopolitical tensions still supporting the gold market, gold prices have halted the recent three-day consecutive upward trend and entered a pause.

According to the New York Mercantile Exchange(COMEX), January gold futures traded at $4589.20, down $15.10(0.33%) from the previous day. This is slightly below the record high closing price of $4604.30 set the previous day, but the price level still ranks as the second-highest in history. During intraday trading, it approached the $4620 level, once again hitting a new high.

December US CPI rose 2.7% year-over-year, in line with market expectations, and core CPI was 2.6%, the lowest since 2021. The month-over-month figure also eased to 0.2%, fueling speculation that the Fed is unlikely to implement additional tightening measures in the near term.

As a result, the gold market temporarily responded more sensitively to the Federal Reserve’s monetary policy path and political risks rather than inflation hedging demand. There are growing concerns that the independence of the Fed may be compromised and that the administration is exerting pressure on the Fed.

In particular, reports that the US Department of Justice is conducting criminal investigations into the Fed Chair’s remarks during a June hearing last year have heightened market anxiety. The Fed Chair criticized the investigation as “a tool of political pressure by the executive branch,” strongly warning against threats to the Fed’s neutrality.

Geopolitical uncertainties are also a major factor driving gold prices higher. The administration announced plans to impose a 25% new tariff on countries trading with Iran, re-suggesting the possibility of military action. Widespread anti-government protests across Iran and ongoing Middle East tensions continue to sustain a strong safe-haven demand.

Market analysts believe these risk factors will support the downside of gold prices for the time being. Technically, the $4600 level acts as a strong resistance and psychological threshold, making short-term fluctuations likely to recur.

Despite this decline, gold prices have risen 6.09% so far this year, maintaining a solid upward trend. On a monthly basis, the increase exceeded 6%, confirming strong upward momentum. Compared to the same period last year, it surged by 71.4%, a steep rise from the 52-week low of $2677.50( recorded in January last year.

Market experts expect that even if gold prices undergo some correction near the highs in the short term, the overall upward trend will continue in the medium to long term. The combination of Fed policy flexibility, political uncertainties, and global central banks increasing gold holdings is expected to positively influence the gold market.