Gold and silver traded at record highs in the middle of the European session on Monday, January 12, the opening session of the week, as the US dollar weakened significantly. The dollar’s decline was driven by escalating tensions and statements between US President Donald Trump and Federal Reserve Chairman Jerome Powell, which boosted demand for safe-haven assets. Gold was trading up approximately 1.82% at $4,592 per ounce, while silver was trading at $84.20 per ounce, a 5.31% increase.

The US Dollar Index (USD) fell by more than 0.40%, trading below 98.50, its biggest daily drop in three weeks. This followed reports that the US Department of Justice is investigating the Federal Reserve regarding the renovation project at the Fed building. Trump has alleged some irregularities in the $2.5 billion project.

In his remarks, Federal Reserve Chairman Jerome Powell indicated that the lawsuit stemmed from the bank’s independent approach to interest rates and that the Fed had not raised rates as the US president had wished. This intensified the dispute and concerns about the central bank’s independence, putting pressure on the US dollar and contributing to gold reaching new record highs.

Markets are awaiting the consumer price inflation figures for Tuesday’s session, with expectations pointing to the index remaining stable at 2.7% year-on-year in December and 0.3% month-on-month. Markets are already pricing in two US interest rate cuts this year, totaling 25 basis points, according to the CME FedWatch tool, in June and September.

Platinum is trading at $2,355, up 3.63%, while palladium is up approximately 2.92%, trading at $1,868.