Gold surges and markets waver as White House ups ante on Fed

Gold prices jumped to a new record while stocks on both sides of the Atlantic were muted as investors took the White House’s latest assault on the Federal Reserve in their stride after chair Jerome Powell’s surprise admission that a threat of criminal indictment is a pretext to force the central bank to lower interest rates.

Wall Street was mixed as financial stocks were knocked by Trump’s call for credit card interest rates to be capped ahead of earnings from the major banks, with JPMorgan Chase due to report on Tuesday, while the tech-heavy Nasdaq Composite rallied as Google-parent Alphabet crossed the US$4 trillion market value mark.

Oil prices remained elevated as the White House contemplates options in response to the deadly crackdown on anti-regime protests in Iran, while Trump mused that Exxon Mobil might miss out on drilling in Venezuela after the energy major’s chief executive Darren Woods called the nation “uninvestible”.

And in the antipodes, Australian futures are pointing to a positive start to the trading day for the ASX amid the surging commodity prices, while the New Zealand Institute of Economic Research’s quarterly survey of business opinion will offer the first signs of life on this side of the Tasman in 2026.

Nothing’s going to break my stride

Gold prices hit a new record, with futures up 2.8% at US$4,628 an ounce at 7am in Auckland, and the greenback was broadly weaker as investors flocked to the relative safety of the precious metal after Federal Reserve chair Jerome Powell said the central bank had been subpoenaed and threatened with criminal prosecution over testimony to a Senate committee, calling that a pretext for the White House’s desire for interest rates to move lower, faster.

Still, Wall Street’s fear gauge was more muted as the volatility index rose 4.5% to 15.14 and stock markets were mixed as the Dow Jones Industrial Average nudged down 0.1% while the tech-heavy Nasdaq gained 0.4% in late trading, while the yield on 10-year US treasuries was unchanged at 4.18%.

“There was limited market impact from the announcement of the criminal investigation into chair Powell, but markets will likely price in higher inflation expectations and term premium if the Fed’s independence comes under further attack,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note.

Financial stocks weighed on the Dow after Trump last week said he wants to impose a 10% cap on credit card interest rates, with Capital One Financial and American Express the hardest hit. JPMorgan Chase was also among the decliners ahead of its December earnings report on Tuesday.

Meanwhile, Google-parent Alphabet touched a market capitalisation of US$4 trillion as its growing push into artificial intelligence has spurred gains for the tech giant.

Bubbling conflicts

Brent crude oil futures rose 0.4% to US$63.59 a barrel as the White House contemplates intervening in Iran, where anti-regime protests have raged for the past two weeks, with more than 500 people reportedly killed.

Separately, Exxon Mobile chief Darren Woods was rebuked by Donald Trump over his comments that Venezuela was uninvestible, with the US President saying the energy major might be excluded from drilling in the Latin American nation’s rich, but degraded, oil fields.

Across the Atlantic, stock markets were similarly muted, with defence companies among those gaining amid the heightened geopolitical tensions. The UK’s FTSE 100  up 0.2%, Germany’s DAX 30 gaining 0.6% and France’s CAC 40 marginally weaker.

France’s Airbus gained after its deliveries rose 4% to 793 in 2025, while warning that it continues to operate in a complex environment.

Investors are also waiting for a Supreme Court ruling on the lawfulness of the White House’s tariff regime. Trump said on the Truth Social platform that a ruling against them would cost the US hundreds of billions of dollars.

In the antipodes, Australian futures are pointing to a 0.3% gain for the S&P/ASX when trading opens this morning, while the kiwi dollar rose to 57.67 US cents at 7am in Auckland from 57.44 cents yesterday.

Local data include the NZIER’s quarterly business confidence survey, which is expected to show improving sentiment among firms on this side of the Tasman.

Reporting by Paul McBeth. Image from Suzy Brooks on Unsplash.