Three Factors to consider in the Gold market, Updating from this morning Gold price has sharply risen to the highest 4601.695 due to the following factors:
Factor 1: Geopolitical Tension
January 12, 2026 at 1:17 AM GMT+7
Geopolitically, Iran is experiencing nationwide anti-government protests and unrest that began in late December 2025, Originally sparked by a deepening economic crisis due to high inflation and currency collapse. Rising unemployment and widespread dissatisfaction with the regime.
Human rights groups reported that more than 500 people have been killed in the past two weeks, and more than 10,000 have been arrested in an illustration triggered by currency crises and economic collapse.
The news of a potential revolution in Iran is shaping a geopolitical risk that is supportive of gold at a premium in the medium term, while volatile in the short term. The core Geopolitical risk in Iran sparks the possibility of revolution or regime destabilization in the Middle East, energy supply, and regional conflict. which immediately raises the risk of regional instability, Risk of spillover into oil market, shipping lanes and military escalation, posing uncertainty around sanctions. In addition, Iran is a major oil producer, any disruption or fear of disruption tends to push the oil price higher and raise the inflation expectation which combined with uncertainty the demand for gold will be increased as an inflation hedge. All these factors signaling the bullish trend in gold as historically gold will benefit when geopolitical tail risk rises.
Factor 2: The Federal Reserve independence crisis
According to Bloomberg on January 12, 2026 at 7:30 AM GMT+ 7, the US Department of Justice (DOJ) has served grand jury Subpoenas to the Federal Reserve, centering on Fed Chair Jerome Powell’s June 2025 congressional testimony about the renovation of the Fed’s headquarters. The Subpoenas threaten a criminal indictment related to the testimony. Powell Said “ The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” he also added “ This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions or whether instead monetary policy will be directed by political pressure or intimidation.”
On the other hand, Gold shifted to a bullish direction and gain extended record high as the dollar weakened on the news. A Legal action against the Fed chair is highly unusual and raises uncertainty about US monetary policy credibility. When uncertainty rises, investors often seek safe-haven assets like gold, pushing prices to go higher.
Factor 3: Weakened Dollar
According to Reuters “As the Fed gets the Subpoenas, the Dollar has dropped Most in nearly three weeks.”. SINGAPORE, Jan 12 (Reuters) said “The dollar fell and U.S. equity futures slid after Federal Reserve Chair Jerome Powell said the Trump administration threatened him with a criminal indictment, stoking investor worries about the central bank’s independence. S&P 500 futures were down 0.5%, while European futures slipped 0.1% in the Asia morning and the dollar was roughly 0.2% lower against most major peers, sending it below 158 yen and to $1.1660 per euro.” In the Bloomberg News said by the Fed chair Powell “the threat of criminal charges stemmed from the central bank setting interest rates based on its own assessment rather than following preferences of President Donald Trump. Trump has repeatedly slammed Powell on social media, urging rate cuts and at one point, threatening to fire him before later backing off and denying he ever considered it.”
This news can serve as a catalyst for the bullish trend of the gold in the near term due to the weakening of the dollar, adding with the market uncertainty, traders may price in the lower interest rate, hence gold will benefit as compared to the yield-bearing assets.
