Gold Tops $5,500 as Silver Surges; Powell Downplays Precious Metal Rally

Gold prices climbed to a new record above $5,500 per ounce, while silver extended its sharp rally, even as US Federal Reserve Chair Jerome Powell dismissed the surge in precious metals as having limited macroeconomic significance.

The rally followed the Federal Reserve’s decision to keep interest rates unchanged within a 3.5% to 3.75% range. Speaking after the policy meeting, Powell defended the central bank’s independence and pushed back against political pressure, urging future Fed leaders to remain outside electoral politics.

“We don’t take much message macroeconomically from moves in gold,” Powell said, adding that the Fed does not react to individual asset price fluctuations, though it continues to monitor financial markets closely.

Markets appeared unconvinced by the reassurance. Gold has risen more than 20% this month, marking its strongest monthly performance since 1980. Silver prices climbed above $117 per ounce, with gains of roughly 55% in January, the strongest monthly rise on record.

At the same time, the US dollar fell to a four-year low, reflecting growing investor concerns over fiscal pressures, expectations of future policy easing, and ongoing debate around central bank independence.

Analysts say the decline in the dollar has been a major driver behind the metals rally, as investors seek protection against currency weakness. The dollar is now more than 10% below its 2025 peak, weighed down by global diversification away from US assets and widening budget deficits.

Veteran economist Ed Yardeni linked the surge partly to political dynamics, suggesting that gold may be emerging as a preferred alternative store of value. He noted that comments by Donald Trump, who has signalled comfort with a weaker dollar, could indirectly support higher gold prices by increasing inflation risks.

The rally has extended beyond gold and silver. Platinum rose above $2,900 per ounce for the first time, while palladium touched a four-year high. Copper also climbed to a record $6.30 per pound, highlighting broader strength across commodity markets.

In currency markets, the euro traded near $1.195, remaining close to recent highs. European equities were mixed, with gains in Paris and Milan offset by losses in Frankfurt.