Gold prices stabilized on Tuesday around 4,585 USD/ounce - up 20.7 USD compared to the previous day. The upward momentum comes from growing concerns about the independence of the US Federal Reserve (Fed), after President Donald Trump's administration threatened to prosecute Fed Chairman Jerome Powell.
In the previous session, gold prices rose 2% when Mr. Powell said that the threat of prosecution was just the next step in a series of pressure actions to force the Fed to change its policy.
President Trump has repeatedly asked the Fed to lower interest rates deeper, a move that observers assess as potentially weakening inflation control. The White House's pressure on the Fed also promotes "devaluation" transactions, where investors sell USD and vulnerable assets in the face of political and fiscal shocks. The Justice Department's investigation into Mr. Powell even made many Republican senators and Treasury Secretary Scott Bessent warn that the White House may be pushing the market into great risk.
The Fed's attacks have contributed to gold continuously reaching its peak in 2025, alongside trade and geopolitical tensions and the gold buying wave of central banks across countries.
Silver went sideways after eliminating a 2% decrease, in the context of strong speculative cash flow causing the metal to fluctuate violently. The three-month implied volatility index of options on the largest silver ETF fund soared, showing that traders are betting on even bigger fluctuations.
Meanwhile, CME Group said it will change the method of calculating futures contract margins for gold, silver, platinum and palladium, applying the margin level according to the percentage of nominal value. The new regulation has been in effect since the end of Tuesday's session, reflecting too strong price increases and recent volatile trading.
Gold has just closed a year of strongest price increases in history, with most of the upward momentum taking place in the second half of 2025, when the global market shook due to a large-scale "short squeeze" and a speculative wave pushing prices to a new peak in December. Gold's upward momentum, concerns about US tariffs and concerns about the Fed losing independence continue to be an important support for this metal.
Citigroup forecasts gold will reach $5,000/ounce and silver will touch $100/ounce in the next three months. "We expect the rising price market to remain in the short term," Citi's analysis team said. However, they believe that as geopolitical risks gradually decrease towards the end of the year, the demand for protection from precious metals - especially gold - may cool down.
As of this afternoon's trading session, spot gold price decreased by 0.2% to 4,588.99 USD/ounce. Bloomberg Dollar Spot index increased by 0.1%. Silver went sideways, while platinum and palladium simultaneously decreased.
