Global financial markets opened the week with sharp volatility on Monday as investors reacted to an unprecedented criminal investigation into the chair of the U.S. Federal Reserve and rising fears of a military escalation involving Iran.
The convergence of legal uncertainty surrounding U.S. monetary governance and intensifying unrest in the Middle East triggered a broad flight to safe-haven assets, pushing precious metals to record highs.
U.S. Justice Department probes Fed chair
The U.S. Department of Justice has opened a criminal investigation into Federal Reserve Chair Jerome Powell, according to officials familiar with the matter.
The probe, led by the U.S. Attorney’s Office in Washington, focuses on allegations that Powell misled Congress during testimony in June 2025 concerning a $2.5 billion renovation of the Federal Reserve’s headquarters.
Prosecutors are examining whether the cost and scope of the project were understated in official disclosures. Powell confirmed over the weekend that the Federal Reserve had received grand jury subpoenas related to the investigation.
In a video statement released on Sunday, Powell said the inquiry amounted to political pressure on the central bank and warned that a potential indictment threatened the Federal Reserve’s independence.
President Donald Trump has denied directing the Justice Department but has repeatedly criticised Powell over interest rate policy. Republican Senator Thom Tillis said he would block future Federal Reserve nominees until the issue is resolved.
Precious metals hit record levels
Gold rose to a record $4,600.33 per ounce in early trading, driven by safe-haven demand. Analysts at HSBC said sustained geopolitical risk could push prices toward $5,000 per ounce by mid-2026.
Silver jumped more than 5% to $84.58 per ounce, while platinum traded near $2,478.50. Palladium also advanced sharply.
Traders described the move as a pronounced risk-off shift amid institutional uncertainty in the United States and escalating geopolitical threats.
Iran unrest fuels war concerns
Geopolitical risk intensified as Iran faced nationwide protests entering a second week. Human rights groups HRANA and Iran Human Rights said between 538 and 544 people had been killed.
Tensions rose further after Trump warned of possible U.S. military action. Iranian officials said any strike would trigger retaliation against U.S. bases and Israel.
Iran has imposed a nationwide internet blackout, limiting independent verification. Analysts said the unrest and threats of escalation added a significant risk premium to global markets.
