Gold starts the week with new record highs, while silver reclaims the 85-handle

Outside Market Developments: Fed Chairman Powell revealed on Sunday that the DoJ had served the Fed with grand jury subpoenas on Friday related to his June 2025 congressional testimony about the central bank's headquarters renovation project. Powell described the action as a pretext for political pressure to force lower interest rates, marking a major escalation in tensions with the Trump administration.

A Bloomberg article suggested FHFA Director Bill Pulte had pushed for scrutiny of Powell's testimony. However, Pulte has denied knowledge of the subpoenas, calling the DoJ "out of my purview."

President Trump has been extremely critical of Powell, so it's not surprising that many see the legal action as an avenue to install a more dovish Fed chair before Powell's term expires in May. The market is expressing concern about the potential loss of Fed independence, but at the same time, acknowledging that the leadership change – whether in May or sooner – will tilt the Fed more dovish.

This is stoking risk appetite to start the week, although Fed funds futures currently suggest the central bank is likely on pause for the first half of 2026. The trade still sees scope for 50 bps in total easing this year, although the first 25 bps cut isn't fully priced in until September. FedSpeak is on tap today from Bostic, Barkin, and Williams 

The Trump administration has vowed to run the economy hot and sees the Fed's measured pace of rate cuts as a hurdle to be overcome. Both Pulte and Trump likely see more aggressive easing as a means to lower mortgage rates, making housing more affordable, and encourage refinancings to free up disposable income.

More disposable income would stoke consumption, which is the primary driver of the U.S. economy. However, lower mortgage rates also tend to drive up home prices. And hotter consumption could revive inflation more broadly. December CPI and PPI data are out later this week, with expectations leaning steady to slightly hotter.

If the DoJ charges are indeed viewed as a "tactic" to expedite Powell's replacement, it could give some GOP Senators pause, posing a challenge for the confirmation of Trump's preferred nominee. That could lead to a centrist Fed chair.

Separately, Trump has called for a one-year cap on credit card interest rates at 10%, amid record-high consumer debt levels. U.S. household debt reached a staggering $18.59 trillion in Q3 2025, with credit card and other revolving debt accounting for $1.21 trillion.

Not surprisingly, the banking industry objects as a 10% cap means some risk is going to be underpriced. This could lead to reduced credit availability, card cancellations for riskier borrowers, and drive consumers to costlier alternatives such as payday loans.

Iran remains gripped by the largest anti-government uprising since 2022. The unrest has spread to dozens of cities and challenges the Islamic Republic's clerical rule. The regime has imposed a near-total internet blackout, intensifying its crackdown with live ammunition and mass arrests.

President Trump has expressed support for the protestors and threatened intervention. Iran says that would prompt retaliation against U.S. and/or Israeli interests.

Venezuela remains in turmoil following the U.S. military operation on January 3 that captured and removed President Nicolás Maduro. While President Trump has vowed a swift restoration of democracy, economic sanctions relief upon verifiable free elections, and massive reconstruction aid, the country faces intensified repression by security forces, widespread uncertainty over governance, and international condemnation of the intervention as a violation of Venezuelan sovereignty.

In Greenland, tensions have escalated dramatically as President Trump repeatedly threatened to acquire the Danish autonomous territory "the easy way or the hard way." Greenlandic and Danish leaders have firmly rejected any sale or annexation, with European allies – including France, Germany, and the UK – issuing strong rebukes.

Here in America, political tensions remain elevated as anti-ICE protests intensified over the weekend. Many media outlets frame them as mounting outrage against perceived overreach in immigration policy, tying into broader criticisms of the administration's tactics, with some explicitly noting risks of wider unrest amid heightened tensions.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$76.42 (+1.69%)
5-Day Change: +$172.37 (+3.87%)
YTD Range: $4,310.83 - $4,629.64
52-Week Range: $2,657.28 - $4,629.64
Weighted Alpha: +72.68

Gold begins the week with a strong bid, reaching fresh record highs above $4,600. The yellow metal is being spurred by heightened haven interest associated with high geopolitical and domestic political tensions, worries over Fed independence, expectations for further Fed rate cuts later this year, a generally soft dollar, and mounting fiscal risks.

 

The $4,624.44 Fibonacci objective has been satisfied, boosting confidence in the extended bullish scenario that suggests potential to $5,000 in Q1'26. Intervening targets are noted at $4,686.61 and $4,719.43.

ETF inflows were a tepid 9.7 tonnes last week, but all regions were net buyers. It was the tenth consecutive week of inflows. I anticipate that today's move to record highs after two weeks of corrective/consolidative action is going to reinvigorate ETF interest.

The previous record highs at $4,549.77/17 now mark initial support. Today's Asian low at $4,509.87 is the more important short-term level to watch. Buying on dips ahead of the latter seems likely with additional support at $4,500.34/$4,497.29. The rising 20-day moving average is well protected at $4,418.59. 


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$3.913 (+4.90%)
5-Day Change: +$9.272 (+12.10%)
YTD Range: $71.429 - $74.552
52-Week Range: $28.565 - $86.637
Weighted Alpha: +229.49

Silver surged back above $85 in overseas trading on Monday, bringing the $86.637 record high from late December back within striking distance. The white metal begins the week with a gain of more than 6%, and a stunning weighted alpha reading well above 200, driven by spillover haven interest, rising geoplitical tensions, and a persistent supply/demand imbalance.



New record highs above $86.637 would clear the way for a push to $88.297 (200% retrace of the decline from $50 to $11.703), $90, and $91.009. An eventual move above the latter would lead to increasingly serious talk about $100 silver.

Intraday support at $83.597 protects today's Asian low at $79.993. The magnitude of the retracement last week went a long way toward confirming that a corrective low was in place at $70.562. I'm calling the $70 zone key support. While it seems likely that volatility is destined to remain high, buying strategies remain favored.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.