Gold Blasts Through $4,600: The Fed Crisis Trade That's Rewiring Financial Markets

Gold broke through $4,600 per ounce on Monday for the first time in history, as investors sought refuge from the escalating institutional crisis engulfing the Federal Reserve. The yellow metal touched an intraday high of $4,630.01 before settling around $4,610—a gain of more than 1.5% in a single session.

The move extends gold's extraordinary run, with prices now up more than 6% in the first 12 days of 2026 alone. After gaining 64% in 2025—its best annual performance since 1979—gold shows no signs of slowing down.

The Powell Probe: Gold's Latest Catalyst

The immediate driver of Monday's surge was the Department of Justice's criminal investigation into Federal Reserve Chair Jerome Powell. While the probe ostensibly concerns testimony about office renovations, Powell himself characterized it as "another attempt by Trump to influence central bank policy."

For gold traders, the implications are profound. The independence of the Federal Reserve has been a cornerstone of global financial stability for decades. Any erosion of that independence could undermine confidence in the dollar—and by extension, in all fiat currencies.

"Gold is the ultimate vote of no confidence in monetary authorities. When the institutional framework itself comes under attack, investors instinctively reach for the one asset that stands outside the system."

— James Rickards, Currency Wars Author and Precious Metals Analyst

Central Banks Lead the Charge

Retail investors aren't the only ones buying gold. Central banks around the world have been accumulating the metal at the fastest pace in decades, driven by concerns about dollar dominance and geopolitical fragmentation.

China, Russia, India, and Turkey have been particularly aggressive buyers, reducing their Treasury holdings and replacing them with physical gold. This "de-dollarization" trend provides structural support for gold prices that extends beyond any single crisis.

• Central bank gold purchases in 2025: 1,136 metric tons (third highest year on record)
• Gold as percentage of global reserves: 16.2% (highest since 2014)
• Treasury holdings by foreign central banks: Down $412 billion from 2021 peak

The Geopolitical Overlay

Beyond the Fed crisis, gold is benefiting from a surge in global geopolitical risk. Intensifying protests in Iran have raised the specter of regional conflict, with President Trump reportedly considering intervention options. The recent regime change in Venezuela adds another layer of uncertainty to commodity markets.

And looming over everything is the threat of expanded tariff wars. If trade tensions escalate with Europe or other partners, the resulting economic disruption could drive even more capital into safe-haven assets.

Where Does Gold Go From Here?

Wall Street's gold bulls are eyeing levels that would have seemed fantastical just a year ago. HSBC's precious metals team suggested that trading momentum could carry prices to $5,000 per ounce in the first half of 2026, even as they cautioned that pullbacks could be sharp along the way.

Bank of America raised its 2026 year-end gold target to $4,800 per ounce on Monday, citing "unprecedented confluence of monetary, geopolitical, and institutional risk factors."

"The path to $5,000 gold is now visible. Whether we get there in three months or nine months depends on how the Fed crisis resolves—or fails to resolve."

— Michael Widmer, Head of Metals Research, Bank of America

The Bear Case

Not everyone is convinced the rally has legs. Goldman Sachs maintains a more cautious stance, noting that real interest rates remain positive and the dollar—despite recent weakness—is still historically strong. Their 2026 target of $4,200 per ounce implies meaningful downside from current levels.

The bears also point to technical indicators suggesting gold is overbought in the short term. The Relative Strength Index (RSI) has exceeded 70 for three consecutive weeks, a level that has historically preceded corrections.

How to Invest in Gold's Rally

For investors looking to participate in gold's move, several options exist:

Physical gold: Coins and bars offer direct exposure without counterparty risk, but come with storage and insurance costs. Premiums over spot price have widened amid strong demand.

Gold ETFs: The SPDR Gold Trust (GLD) and iShares Gold Trust (IAU) provide liquid exposure to gold prices without the hassle of physical ownership. Both have seen significant inflows in early 2026.

Mining stocks: Gold miners offer leveraged exposure to the metal, with earnings amplified by rising prices. The VanEck Gold Miners ETF (GDX) has lagged the metal's move, suggesting potential catch-up opportunity.

Gold futures: For sophisticated investors, futures contracts on the COMEX offer the most direct price exposure, though they require understanding of margin requirements and contract rollovers.

What Gold Is Really Telling Us

Beyond the trading implications, gold's surge carries a deeper message. The metal has served as a store of value for millennia precisely because it exists outside the control of any government or central bank. When confidence in institutions wavers, gold becomes the ultimate vote of no confidence.

Monday's move past $4,600 isn't just about Powell or the Fed. It's about a global financial system under strain, with investors increasingly questioning the stability of structures they once took for granted. Whether those concerns prove justified or overblown, gold will continue to serve as the market's real-time referendum on institutional trust.

For now, that referendum is delivering a resounding verdict: more fear, more uncertainty, and more gold.