Onome Amuge
Gold hovered just below record highs on Tuesday as investors weighed heightened geopolitical risks in the Middle East against deepening political tensions in the United States, while awaiting fresh inflation data that could shape expectations for future monetary policy.
Spot gold was little changed at $4,588.9 a troy ounce in early European trading, after rising to an all-time high of $4,629.4 in the previous session. US gold futures for March eased 0.4 per cent to $4,596.81 an ounce, reflecting some consolidation after the recent rally.
The precious metal’s advance has been fuelled by geopolitical and political shocks that have reinforced its appeal as a haven asset. Escalating unrest in Iran, where anti-government protests have intensified, has raised concerns about broader regional instability. US officials have issued warnings of possible intervention, amplifying market anxiety over potential spillover effects across energy and financial markets.
Analysts said the Iran situation was adding to an already elevated geopolitical risk premium. “Protests in Iran keep tensions high, while President Trump’s renewed threats to take control of Greenland add to the upside risks for precious metals,” analysts at ING said in a note.
At the same time, turmoil in Washington has unsettled investors, particularly following unprecedented moves targeting the Federal Reserve. The Trump administration has served the central bank with grand jury subpoenas and launched a criminal investigation into Fed chair Jay Powell, linked to his June congressional testimony regarding a renovation project at the Fed’s headquarters.
The investigation has rattled markets by raising fears of political interference in US monetary policy, long regarded as a cornerstone of financial stability. In a public statement, Powell described the subpoenas and threats of criminal indictment as “pretexts” designed to pressure the Fed into altering its interest rate stance. He reiterated that policy decisions would continue to be guided by economic data rather than political considerations.
The episode has reinforced demand for gold, which typically benefits during periods of institutional uncertainty and declining confidence in policy independence. Investors are increasingly using bullion as a hedge against political risk, alongside its traditional role as a safeguard against inflation and currency volatility.
Attention is now turning to US consumer price index data due later on Tuesday, which markets see as a key test for inflation dynamics. The figures are expected to influence expectations over whether the Federal Reserve could begin cutting interest rates in 2026, a prospect that would further support non-yielding assets such as gold if confirmed.
Other precious metals also eased after strong gains in the previous session. Silver was flat at $84.94 an ounce, having reached a record $86.22 on Monday. Platinum fell 1.4 per cent to $2,310.09 an ounce, retreating after a more than 3 per cent rally a day earlier.
In industrial metals, copper prices slipped modestly but remained close to historic highs. Benchmark copper futures on the London Metal Exchange declined 0.6 per cent to $13,089.20 a tonne, while US copper futures fell 0.3 per cent to $5.99 a pound. Both contracts posted notable gains on Monday and continue to trade near record levels touched last week, underpinned by tight supply conditions and expectations of sustained demand linked to the energy transition.
For now, analysts say the outlook for gold remains supportive, with geopolitical uncertainty, questions over central bank independence and the trajectory of US inflation likely to keep investors defensively positioned in the near term.
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