Gold prices increased during Asian trading on Wednesday, remaining just below the record highs reached in the prior session. This movement was influenced by stable U.S. inflation data, which reinforced expectations for Federal Reserve rate cuts this year, alongside geopolitical tensions in Iran that bolstered safe-haven demand. Spot Gold rose 0.7% to $4,623.55 an ounce by 22:19, after hitting an all-time high of $4,634.33/oz on Tuesday. U.S. Gold Futures for March increased by 0.6%, reaching a price of $4,627.10 per ounce.
Silver prices exhibited notable strength, increasing by 3% to reach a new record high of $90.04 per ounce on Wednesday. Robust industrial demand coupled with safe-haven flows has contributed to the upward momentum in silver prices. Platinum exhibited a positive trend, increasing by 4% to $2,415.21, approaching the record highs reached in the previous month. The U.S. consumer price index data published on Tuesday fell short of expectations. The core CPI experienced an increase of 0.2% in December and 2.6% on a year-over-year basis, falling short of expectations and bolstering speculation regarding potential future rate cuts. Current market expectations indicate approximately two rate reductions anticipated in 2026. According to a recent note analysts, the prospect of two Fed rate cuts appears entirely feasible, with the potential for a third cut becoming more likely given the current trends in the labor market.
Reduced interest rates typically favor non-yielding assets like bullion, as they diminish the opportunity cost associated with holding such assets. Geopolitical risks continued to command significant attention. Iran is currently experiencing escalating anti-government protests, which have allegedly resulted in approximately 2,000 fatalities, heightening concerns regarding broader instability in the Middle East. The unrest has elicited caution from U.S. President Donald Trump, who indicated the potential for military intervention and threatened to implement a 25% tariff on nations engaging in trade with Iran.
Trump additionally encouraged demonstrators to intensify their pressure on the Iranian authorities, stating on social media that they should “take over your institutions” and that “help is on its way.” Further supporting gold were concerns regarding the autonomy of the U.S. central bank following the initiation of a criminal investigation by the Trump administration involving Federal Reserve Chair Jerome Powell. Despite the development causing unease among investors, central bank leaders and prominent bank executives expressed their support for Powell, emphasizing the necessity of maintaining the Federal Reserve’s independence in the face of political pressures.