Gold prices rose during Monday’s trading, supported by a weaker US dollar against most major currencies, amid growing investor concerns over the independence of the Federal Reserve.

This followed the US Department of Justice opening a criminal investigation into Federal Reserve Chair Jerome Powell, a move widely seen as an escalation by President Donald Trump in his efforts to pressure the central bank.

In an unusual live video statement late Sunday, Powell confirmed that federal prosecutors had launched a criminal investigation related to his testimony before the Senate Banking Committee regarding the renovation of the Federal Reserve’s office buildings.

Powell said the investigation represents another attempt by Trump to influence the central bank’s monetary policy, stressing that he will not yield to such pressure before his term as Fed chair ends in May.

Former Fed Chair Janet Yellen criticized the investigation, warning that it threatens the independence of the central bank and describing the move as pushing the country toward “banana republic” territory.

Meanwhile, the US Dollar Index fell 0.3% by 20:35 GMT to 98.8 points, after hitting a high of 99.2 and a low of 98.6.

In trading, spot gold jumped 2.5% to $4,613.3 per ounce by 20:39 GMT.

Federal prosecutors have opened a criminal investigation into US Federal Reserve Chair Jerome Powell over his testimony before Congress last June regarding the $2.5 billion renovation project of the central bank’s headquarters in Washington, DC.

This shocking move against the independent Federal Reserve was met with an equally unprecedented response, as Powell released a video statement late Sunday saying the investigation was a direct result of his ongoing conflict with the US administration over interest rate policy. He said the probe was the outcome of “persistent threats and pressure” from the administration.

Powell said in a statement issued late Sunday: “The threat of criminal charges is the result of the Federal Reserve setting interest rates based on its best judgment of what serves the public interest, rather than complying with the president’s preferences.”

The investigation sends a deeply troubling signal to Powell, and to anyone who may lead the Federal Reserve in the future. President Donald Trump’s sustained attacks on the central bank chief—whom he has openly said he will not renominate—have already dealt a significant blow to the long-standing tradition of political independence at the Federal Reserve. Trump has repeatedly said he believes he should have a say in interest rate decisions.

Opening a criminal investigation, however, takes Trump’s conflict with the Fed to an unprecedented level. It signals that whoever Trump selects to replace Powell when his term ends in May will face ongoing pressure from the administration to cut interest rates.

Investors and economists around the world place paramount importance on the Federal Reserve’s independence, as it ensures policymakers focus on the long-term consequences of monetary policy rather than short-term political considerations when steering the economy.

On Sunday, Powell explicitly linked the investigation to the issue of Fed independence and its ability to set interest rates without political interference, saying: “This case is about whether the Federal Reserve will be able to continue setting interest rates based on evidence and economic conditions, or whether monetary policy will instead be conducted through political pressure or intimidation.”

Justice Department spokesperson Chad Gilmartin declined to comment on the investigation, but said in a statement that the attorney general wants to “prioritize investigations into any misuse of taxpayer funds.”

The White House referred inquiries to the Justice Department’s statement. In an interview with NBC News on Sunday, Trump denied knowledge of the investigation, saying: “I don’t know anything about it, but he’s certainly not very good at running the Federal Reserve, and not very good at building buildings.”

A Year-Long Pressure Campaign

Trump and his allies have repeatedly attacked Powell over the past year for not cutting interest rates at the pace the president wants. While the Federal Reserve cut rates three times in the second half of last year, officials have recently said they do not anticipate another cut in the near term.

Trump’s pressure campaign has included a stream of personal insults directed at Powell, later escalating into threats to remove him. Powell has repeatedly stated that Trump does not have the legal authority to fire him.

Later in the year, Trump targeted Federal Reserve Governor Lisa Cook, who was appointed by former president Joe Biden. Trump and his allies accused her of mortgage fraud and cited those allegations when she was dismissed in August, despite no criminal charges being filed against her. The Supreme Court is scheduled to consider later this month whether Trump had the authority to remove Cook.

The Fed headquarters renovation project has also been a persistent source of controversy. Powell testified before Congress in June, explaining that the project was carried out in coordination with multiple agencies and that its cost evolved over time.

Trump threatened to sue Powell over the project, saying last month that he was considering “filing a case against Powell for incompetence.”

Trump allies, including Federal Housing Finance Agency Director Bill Pulte and Office of Management and Budget Director Russ Vought, accused those overseeing the project of mismanagement. The Federal Reserve, however, said the upgrades to the decades-old buildings were necessary, including asbestos removal and major updates to electrical and ventilation systems.

Tensions peaked in July when Trump joined Powell for a tour of the renovation site. During the visit, Powell corrected Trump’s claims about the project’s cost in front of reporters, a moment that visibly underscored the strain between the two men.

Powell’s Expected Successor

The federal investigation comes as Trump prepares to announce his choice to succeed Powell when his term ends in May. The decision is expected to conclude a months-long search for what is widely regarded as one of the most influential positions in the global economy.

Trump has hinted that the next Fed chair could be Kevin Hassett, director of the National Economic Council, but he has also recently interviewed former Fed governor Kevin Warsh and is expected to interview Rick Rieder, BlackRock’s chief investment officer for global fixed income.

Trump said he will announce his pick “early” this year.

Following the announcement of the investigation on Sunday evening, Republican Senator Thom Tillis of North Carolina said in a post on X that he would “oppose confirming any Federal Reserve nominee—including the next Fed chair—until this legal matter is fully resolved.” Tillis has said he does not plan to seek re-election.

Democratic Senator Elizabeth Warren of Massachusetts echoed that stance, saying in a statement: “The Senate should not move forward with confirming any Trump nominee to the Federal Reserve, including the next chair.”

Senate Minority Leader Chuck Schumer also criticized the move, saying in a statement that “Trump’s attack on the independence of the Federal Reserve continues, and it threatens the strength and stability of our economy.”

Schumer added: “This is the kind of bullying we have come to expect from Donald Trump and his allies. Anyone who shows independence or refuses to fall in line with Trump gets investigated.”

Investors and analysts also expressed concern about the investigation and its potential implications for the world’s largest economy.

Krishna Guha, vice chairman at Evercore ISI, wrote in a note: “We are shocked by this deeply concerning development, which came abruptly after a period when tensions between Trump and the Federal Reserve appeared to have been contained.”

He added: “As of this writing, we are still seeking more information and context, but on its face, it appears that the administration and the central bank have now entered an open confrontation.”

Palladium prices rose during Monday’s trading session, supported by continued positive expectations for strong demand for the industrial metal this year.

Amid sustained demand for platinum group metals (PGMs), BofA Securities’ global research team raised its 2026 price forecast for platinum to $2,450 per ounce from a previous estimate of $1,825, and lifted its palladium forecast to $1,725 per ounce from $1,525.

Key takeaways from the bank’s weekly Global Metals Markets report, dated January 9, showed that trade-related disruptions to PGM flows continue to keep markets tight, particularly the platinum market. The report also noted that Chinese platinum imports are providing additional price support.

While a supply response is likely, the bank expects it to be gradual, citing what it described as “production discipline and limited mine supply elasticity.”

These forecasts come as platinum and palladium prices continue to rise this year, with spot prices reaching $2,446 per ounce for platinum and $1,826 per ounce for palladium.

Both metals have now exceeded the bank’s previous forecasts, prompting the upward revision in price estimates.

In comments to Mining Weekly, the bank said it continues to expect platinum to outperform palladium, supported by persistent market deficits.

The bank noted that US tariffs have had a clear impact on several metals markets, and that the risk of additional tariffs continues to loom over PGMs.

This has been one of the factors behind rising inventories at the Chicago Mercantile Exchange, alongside a surge in exchange-for-physical (EFP) activity.

Palladium EFPs have been particularly strong, driven largely by growing concerns over the potential imposition of US tariffs on Russian palladium, amid ongoing anti-dumping and countervailing duty investigations.

In this context, the bank said the US Department of Commerce has estimated the dumping margin for unworked Russian palladium at around 828%.

The bank added that the imposition of tariffs on as-yet-unspecified Russian volumes could push local prices higher, given Russia’s role as a key palladium supplier.

Chinese import demand adds further price support

Outside the United States, China has provided additional support to prices. Early in 2025, a sharp recovery in jewellery sector activity drew more ounces into the Chinese market. With gold prices at record highs, this development is particularly significant, as substituting as little as 1% of gold jewellery demand could widen the platinum deficit by around one million ounces, equivalent to roughly 10% of total supply.

In the second half of 2025, the launch of physically backed platinum and palladium futures contracts on the Guangzhou Futures Exchange (GFEX) provided further support to prices.

These contracts represent China’s first domestic hedging tools for PGMs, denominated in renminbi, and allow for physical delivery of both bars and sponge metal. The bank said improved physical liquidity was a key driver behind the sharp price rally seen in December.

China’s palladium imports have also quadrupled since September compared with the previous year, a development the bank described as difficult to explain on fundamental grounds given the ongoing shift away from internal combustion engines. It suggested the surge is largely linked to the launch of palladium futures on the Guangzhou exchange.

Gradual supply response expected

With PGM prices now trading above marginal production costs and incentive prices for investment, markets are closely watching the potential supply response.

The bank said it expects any response to be measured, noting that producer margins — particularly in South Africa and North America — have remained under pressure over the past two years, which may encourage caution in expanding output.

New supply additions are also likely to emerge only gradually, reflecting long lead times from development to steady-state production.

Many ongoing projects represent incremental expansions or phased increases, rather than sources of rapid, large-scale supply growth.

On the supply side, production challenges in South Africa tightened the platinum market in 2025. Mine output in the country fell by around 5% year on year between January and October 2025, mainly due to operational issues such as flooding and plant maintenance in the first quarter. The bank expects a modest recovery in South African platinum output this year, but not enough to eliminate the market deficit.

In Russia, the world’s largest palladium supplier, production has also faced challenges as Norilsk Nickel transitioned to new mining equipment and dealt with changes in ore composition. As a result, the company’s platinum output fell 7% year on year and palladium output declined 6% during the first nine months of 2025. As these temporary disruptions fade, Russian PGM production is expected to recover this year, potentially capping the pace of palladium price gains.

While higher prices can incentivize increased supply, the bank believes additional volumes are more likely to come from life-of-mine extensions and project restarts rather than rapid capacity expansions.

In practice, most new supply requires several years to move from construction to full production, and many projects currently under development are expansions or phased increases rather than immediate sources of large additional volumes.

The bank noted that two major new projects — Ivanhoe Mines’ Platreef project and Wesizwe’s Bakubung project in South Africa — are progressing toward production and are expected to add a combined 150,000 ounces of platinum and 100,000 ounces of palladium this year.

Other expansion projects remain longer-term and depend on final investment decisions. Among them is Valterra Platinum’s Sandsloot underground project at the Mogalakwena mine, which is not expected to reach an investment decision before 2027, with underground ore production unlikely to begin before 2030.

In trading, March palladium futures rose 3.25% to $1,931 per ounce by 16:21 GMT.

Bitcoin rose during Asian trading on Monday, holding broadly steady compared with last week, as risk appetite remained under pressure amid escalating tensions between US President Donald Trump and the Federal Reserve.

Persistent global geopolitical uncertainty, alongside caution ahead of key US economic data due later this week, also kept markets in a wait-and-see mode.

Bitcoin underperformed the rally in technology stocks, which were supported by improving sentiment toward artificial intelligence. While the world’s largest cryptocurrency often moves in tandem with tech equities, this correlation appears to have weakened gradually over the past year.

At the same time, the absence of clear positive catalysts for crypto markets has kept Bitcoin under pressure through late 2025 and into early 2026.

Bitcoin rose 1.5% to $92,094.4 by 00:51 ET (05:51 GMT).

Federal Reserve indictment risks and geopolitical tensions cap risk appetite

A renewed hit to risk appetite on Monday limited further gains in Bitcoin.

Federal Reserve Chair Jerome Powell said the central bank had received a subpoena from the US Department of Justice and that he faces the possibility of criminal charges related to ongoing renovation work at the Federal Reserve’s headquarters.

Powell suggested the investigation was politically motivated, pointing to repeated calls from the Trump administration for aggressive interest rate cuts.

Powell’s remarks weighed on US equity futures and triggered a renewed move into safe-haven assets, led by gold and other precious metals. Markets voiced concern that the escalating conflict between Trump and the Federal Reserve could undermine the central bank’s independence, particularly as Trump prepares to nominate Powell’s successor in the near future.

Risk aversion was further reinforced by persistent global geopolitical uncertainty. Trump renewed calls for the United States to take control of Greenland, a scenario that has unsettled markets further following last week’s US intervention in Venezuela.

Meanwhile, the diplomatic crisis between China and Japan showed no signs of easing, while attention also remained focused on widespread protests in Iran and ongoing fighting between Russia and Ukraine.

Cryptocurrency prices today: modest gains in altcoins ahead of US inflation data

Other cryptocurrencies posted modest gains alongside Bitcoin on Monday but remained largely within their recent trading ranges.

Market focus this week is firmly on US consumer price index data for December, due on Tuesday, which is expected to play a key role in shaping interest rate expectations.

Ether, the world’s second-largest cryptocurrency, rose 2% to $3,160.47, while XRP slipped 0.6%.