Gold-linked ETFs jumped to fresh 52-week highs on Wednesday as bullion's relentless rally powered inflows into both physical and mining-focused products, with investors seeking shelter from mounting political and monetary uncertainty.
The GS Physical Gold ETF (NYSE:AAAU), GraniteShares Gold Trust (NYSE:BAR) and Themes Gold Miners ETF (NASDAQ:AUMI) all touched new one-year peaks, tracking a surge in spot gold that has rewritten the record books multiple times this week. On Wednesday, gold touched fresh all-time high $4,640 an ounce, extending a breakout that has gathered pace since early January.
Fed Independence Worries
The immediate catalyst has been a sharp escalation in concerns over the Federal Reserve's independence. Gold and silver ripped higher after reports that the Department of Justice opened a criminal probe into Fed Chair Jerome Powell over renovation costs at the central bank’s headquarters. Powell has characterized the investigation as a pretext to intensify political pressure to cut interest rates, putting the central bank on a collision course with President Donald Trump's policy demands.
Markets didn't wait around for clarification. Treasuries were sold aggressively, while capital rotated into precious metals, traditionally viewed as a hedge against political risk and policy instability. On Monday alone, gold jumped more than 2.5%, while silver surged over 7%, pushing its 12-month gain beyond 190%.
Gold ETFs rally
ETF performance reflects that scramble for safety. AAAU and BAR, both physically backed gold trusts, benefited directly from rising spot prices, up more than 72% each from their 52-week lows, reaching their 52-week highs of $45.74 and $45.68. Meanwhile, AUMI climbed as gold miners rallied on expectations of expanding margins if higher bullion prices hold, reaching a 52-week high of $102.5 after increasing more than 170% from its 52-week lows.
Beyond the headlines, macro strategists argue the rally has deeper roots. In an interview with Benzinga, macro analyst Tavi Costa said markets are underestimating how constrained the Fed has become as debt servicing costs rise and fiscal pressures intensify. According to Costa, precious metals are responding to structural forces rather than short-term momentum.
Recent inflation data has added fuel to that view. December CPI showed headline inflation steady at 2.7% and core inflation easing to 2.6%, the lowest since 2021, reinforcing expectations that real rates could stay capped even as fiscal stress grows.
Wall Street forecasts are already racing ahead of spot prices. JPMorgan sees gold reaching $5,000 by Q4, while Goldman Sachs projects $4,900 by year-end. These targets help explain why gold ETFs are glittering like it's awards season.
For now, investors appear content to let gold do what it does best when confidence wobbles— shine.
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