Gold and Silver Extend Record Rally as Fed Uncertainty and Global Tensions Intensify

Gold and silver closed 2025 at record highs, and that rally has accelerated into early 2026. A combination of strong demand, constrained supply, and rising political uncertainty is driving investors toward precious metals. New concerns about central bank independence have further intensified buying pressure.

Monetary Policy Uncertainty Fuels Record Gold and Silver Prices

Gold prices jumped above $4,600 an ounce this week after reports emerged that Jerome Powell, chair of the U.S. Federal Reserve, is under criminal investigation related to a $2.5 billion renovation of the Fed’s headquarters. The news sparked an immediate market reaction, pushing prices to fresh records.

By Wednesday morning, spot gold was trading near $4,633.46 an ounce. Silver also extended its gains, breaking above $90 for the first time on Tuesday before rising 3.5% to $90.42 per ounce.

The surge follows a difficult year for investors who positioned against metals. In 2025, spot gold climbed about 65%, while silver surged roughly 150%. Momentum has carried into the new year, with gold already up 7.1% in January and silver gaining 26.6%.

Fund managers argue that the forces behind last year’s rally remain firmly in place. Tight supply, geopolitical instability, and uncertainty over monetary policy continue to support prices, with few signs of easing.

Gold and Silver Gain as U.S.–China Resource Standoff Deepens

Daniel Casali, partner in investment strategy at Evelyn Partners, said his firm remains bullish on both gold and silver. He pointed to ongoing geopolitical stress, including Russia’s invasion of Ukraine and tariff measures announced by Donald Trump last April, as key drivers of safe-haven demand.

Casali characterized current trade disputes as a strategic resource standoff between the U.S. and China. In response to U.S. tariffs, China has restricted exports of rare-earth materials, highlighting Western dependence on these inputs for defense systems, advanced technology, and artificial intelligence infrastructure.

Export controls have since expanded to include silver, a critical component in industrial production across the U.S. and Europe. Rapid growth in AI hardware, electric vehicles, renewable energy, and electronics has intensified pressure on an already limited supply.

Key forces shaping the metals market include:

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  Escalating U.S.–China trade disputes.
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  Chinese restrictions on rare-earth and silver exports.
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  Rising industrial demand from AI, clean energy, and defense.
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  Limited growth in global mine supply.
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  Increased investor preference for physical metal.

Focus Shifts to Trump-Xi Summit, Export Control Talks to Take Center Stage

Attention is now focused on a potential meeting between Donald Trump and Chinese President Xi Jinping, expected in April. Casali noted that export controls are likely to dominate discussions, though the outcome remains uncertain.

Political risk has also increased elsewhere. In early 2026, the U.S. removed Venezuelan President Nicolás Maduro from power and discussed potential military actions related to Greenland. Casali observed that both Washington and Beijing are aggressively securing access to critical resources to strengthen their negotiating positions.

China maintains leverage through its control of rare-earth and silver exports, while the U.S. has moved to restrict Venezuelan oil flows—much of which previously supplied China.

Gold Eyes $5,000, Silver $100 as Political Risk and Supply Crunch Intensify

Ned Naylor-Leyland, investment manager at Jupiter Asset Management, argued that gold reaching $5,000 an ounce and silver surpassing $100 are realistic scenarios. He expects both levels to be tested at some point in 2026 if current conditions persist.

According to Naylor-Leyland, silver remains the tighter market. Export controls have redirected large volumes to Asia, where buyers in Shanghai are paying premiums of roughly $10 per ounce. Trading activity has also shifted away from futures toward physical bars.

Silver’s broad industrial role adds to the strain. Electronics, vehicles, household appliances, renewable energy systems, and weapons platforms all depend on reliable supply. Disruptions quickly ripple through production chains.

Gold, meanwhile, continues to benefit from heightened political risk and looser monetary policy. Rate cuts, unconventional policy tools, and growing pressure on the Federal Reserve have strengthened gold’s appeal as a store of value.

Several factors continue to support elevated metals prices:

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  Doubts over Federal Reserve independence.
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  Expectations of additional rate cuts.
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  Persistent weakness in the U.S. dollar.
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  Expanding government deficits.
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  Ongoing geopolitical conflicts.

Paul Syms, head of EMEA ETF fixed income and commodity product management at Invesco, assessed current conditions as even more supportive than last year. The investigation involving Powell has further undermined confidence in U.S. monetary policy credibility.

Although central bank officials from institutions such as the European Central Bank and the Bank of England publicly backed Powell, investor concerns have not subsided.

Syms added that a combination of dollar weakness, elevated geopolitical risk, rising industrial demand for silver, and lower interest rates leaves little reason to expect a near-term correction. For now, gold and silver remain firmly in favor as 2026 progresses.