Concerns about a "panic bubble"

Two escalations drive gold price to record high

Gold was one of the most sought-after asset classes last year.(Bild: photobc1 - stock.adobe.com)

At the beginning of the year, the price of gold rose even faster than experts had predicted. Two notable escalations are currently contributing to the rally in precious metals – and fueling the gold rush.

These are turbulent times. The escalating situation in Iran and growing concerns about the independence of the US Federal Reserve are causing the price of gold to skyrocket. Accordingly, on Monday night, the price of a troy ounce of gold (approximately 31.1 grams) climbed to almost $4,600 (€3,915)! It then fell, but was still up one and a half percent at $4,578 in early morning trading.

With this increase, gold has extended its gains this year to six percent. Last year, the price rose by 65 percent, the strongest increase since 1979. Silver's annual gain was significantly higher at almost 150 percent. On Monday, the price of an ounce of silver rose by four and a half percent to $83.45, just below the record high at the end of 2025.

Experts see a "panic bubble"
Traders attributed the current rise in precious metal prices primarily to the situation in Iran. According to market insiders, this disproportionate increase is due to a "panic bubble." Fearing an escalation of protests and a further collapse of the national economy, Iranians are desperately exchanging their rials for gold. The asset is valued in times of crisis because of its high liquidity and ease of transport, reports Euronews.

Experts also cited growing concerns about the independence of the US Federal Reserve as a factor in the gold price.

The dispute between US President Donald Trump and the head of the US Federal Reserve has recently escalated: Jerome Powell has rejected criminal investigations against him and the threat of indictment as an attempt to influence the work of the Federal Reserve (Fed). According to Powell, the US Department of Justice issued subpoenas to the Fed and threatened to bring charges.

Fed chief speaks of pretext
He is accused of making false statements to the Senate in connection with the multi-year renovation of the central bank's buildings in Washington. However, the Fed chief sees this as nothing more than a pretext: "The issue is whether the Fed can continue to set interest rates based on facts and economic conditions – or whether monetary policy will instead be determined by political pressure or intimidation."

At the beginning of the year, gold and silver prices also benefited from increased political uncertainty following the US attack on oil-rich Venezuela. Precious metals – especially gold – are considered by many investors to be safe havens into which investors can shift their money during times of political uncertainty. Silver is also an important industrial metal that is needed for numerous applications in AI, robotics, and energy.