Federal Independence Concerns Drive Gold and Silver to New Highs

 

Fed Independence Concerns Drive Gold and Silver to New Highs

(Bullion News Network) – The spot price of gold set a new all-time high on Monday, gaining over $70 per troy ounce to top $4,595/ozt. Silver once again outpaced gold, with its spot price adding approximately $5.25/ozt to set a new all-time high of $85.34 per troy ounce. The price action heavily favored silver, driving the gold-silver ratio more than 2.35 points lower to around 54.04:1, its lowest rate since February of 2013. Platinum-group metals also ended Monday in the green. Platinum gained more than $74 per troy ounce, settling at around $2,360/ozt, while platinum added $39.37/ozt to its spot price, closing the day over $1,880 per troy ounce.

Over the weekend, the Federal Reserve announced that Fed Chair Jerome Powell is being investigated by the Justice Department for accusations stemming from the renovation of the Federal Reserve headquarters. The probe sparked concerns that the Trump administration may target the Fed’s longstanding independence, driving safe haven assets like gold and silver sharply higher as a result. U.S. President Donald Trump criticized Chair Powell frequently throughout 2025, accusing the economist of leveraging rate cuts to assist his opponent, Democrat Kamala Harris, during the 2024 election. Trump also consistently implored Powell to cut interest rates last year, even suggesting at points that he may attempt to fire the head of the Federal Reserve.

The Justice Department probe stems from Chair Powell’s statements concerning the cost and features associated with the Federal Reserve headquarters renovation. According to the Department of Justice, Powell may have misrepresented the escalating costs of the renovations, as well as the new building’s luxury features, to lawmakers in Congress. 

Powell’s term as Chairman of the Federal Reserve will end in May, when President Trump will be responsible for choosing his replacement. Chair Powell issued a statement on Sunday alleging that the Justice Department’s probe is a pretext to punish him and the Federal Reserve for refusing to cut interest rates, despite President Trump’s wishes.

This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role […] Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.

In his statement, Powell said that he and the Federal Reserve will “continue to do the job the Senate confirmed me to do.” Notably, Powell’s statement directly addressed fears that the Trump administration is attempting to exert political pressure on the central bank. “This is about whether the Fed will be able to set interest rates based on evidence and economic conditions,” Powell said, “or whether instead monetary policy will be directed by political pressure or intimidation.”

President Trump claimed to know nothing about the probe during an interview with NBC News Sunday night. “I wouldn’t even think about doing it that way,” Trump said. “What should pressure him is the fact that rates are too high. That’s the only pressure he’s got.” White House press secretary Karoline Leavitt told Fox News that Powell is “not very good at his job,” and that whether he broke the law is “an answer the Department of Justice is going to have to find.”

The probe drew criticism from several lawmakers and former Treasury Department officials. A group of 13 former Fed chairs and Treasury secretaries signed a joint statement condemning the Trump administration’s efforts to pressure Powell and the Federal Reserve into cutting interest rates. Over the weekend, Republican Senator Thom Tillis also issued a statement rebuking the Trump administration for the investigation.

If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question. 

Tillis went on to state that he will “oppose the confirmation of any nominee for the Fed” until the resolution of the Justice Department probe.

The turmoil drove gold and silver to record highs on safe haven demand. The Federal Reserve is set to meet at the end of this month and is widely expected to keep interest rates unchanged for the first time since its August meeting. This week will see speeches from multiple Federal Reserve officials, as well as a fresh inflation reading (CPI) scheduled for Tuesday.