Asian equities gain, precious metals set new records

Gold soared 1.6% to nearly $4,600 an ounce, while silver approached $85 an ounce as investors sought safe havens

Asian equities gained Monday, and precious metals set new records as investors digested news that the US Justice Department is probing the central bank, raising fears over the bank’s independence.

Gold soared 1.6% to nearly $4,600 an ounce, while silver approached $85 an ounce – both records – as investors sought safe havens. The dollar dropped nearly 0.2% against major peers, according to Bloomberg.

Asian markets were up, led by gains in Hong Kong, Shanghai, Seoul, Taipei and Manila.

Singapore, Kuala Lumpur, Jakarta and Sydney were also in the green, while Mumbai, Bangkok and Wellington slipped.

Meanwhile, U.S. central bank Chair Jerome Powell confirmed the “unprecedented” move late Sunday, which he blasted as part of US President Donald Trump’s pressure campaign for another rate cut.

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, Powell said in a statement late Sunday.

Powell said the bank received grand jury subpoenas on Friday related to his Senate testimony in June, which had been about a major renovation project of central bank office buildings.

The bank has indicated it would hold interest rates steady in its closely watched meeting at the end of this month.

The subpoenas mark a clear break in the long-held boundary between politics and monetary policy, a line markets once assumed was untouchable, Stephen Innes of SPI Asset Management told AFP.

Investors are not weighing the odds of charges so much as the risk that political pressure has crept into the Fed’s decision-making, Innes added.

Michael Brown of Pepperstone said the dollar and Treasuries were likely to face headwinds as the probe shakes confidence in US institutions and “by extension, assets”.