Gold Holds Near Record High Amid Growing Concerns Over Federal Reserve Independence

Gold extended its upward momentum Friday, closing at $2,448.70 per ounce, just shy of a new all-time high. The precious metal has gained nearly 12% year-to-date, driven by heightened uncertainty surrounding the independence of the Federal Reserve. Market participants are reacting to recent public statements from senior policymakers questioning the Fed’s autonomy, sparking fears that fiscal policy could override monetary neutrality. The price action underscores a growing shift in investor sentiment toward safe-haven assets. Silver followed suit, rising to $33.65 per ounce, while the yellow metal's performance outpaced broader equities, which saw modest gains. Analysts note that gold’s resilience reflects not only inflation concerns but also geopolitical risks and a perceived weakening of institutional safeguards within the U.S. financial system. This trend is particularly notable given the Fed’s upcoming policy meeting scheduled for January 31–February 1. With interest rate projections already pricing in a 65% chance of a rate cut by mid-year, investors are now factoring in the possibility of political pressure to lower rates further, even if economic data suggests otherwise. Such scenarios have historically boosted demand for gold as a hedge against currency devaluation and policy unpredictability. Market observers highlight that Treasury yields fell across the curve, with the 10-year yield dropping to 4.19% from 4.31% earlier in the week—another sign of capital fleeing riskier assets. This flight to safety has bolstered gold’s appeal, especially among institutional funds managing large-scale portfolios amid global instability.