The price of gold has soared to a new record high as concerns about fresh threats to the independence of the US central bank fuel demand for the asset.
The metal climbed by around 2% on Monday morning to a high of 4,600 US dollars (£3,415) per ounce, beating a previous record set in late December.
Rising gold prices typically indicate that investors are seeking out so-called safe haven assets.
These tend to carry less risk than other investments, such as stocks and shares, and often outperform financial markets during periods of turbulence.
Gold prices have shot up by about 70% over the past year, strengthening against broader economic and political uncertainty.
The latest rush to the precious metal came after US central bank chairman Jerome Powell said it was being threatened with a criminal indictment over his testimony about renovations at Federal Reserve office buildings.
It represents a significant escalation in President Donald Trump’s criticism of the Federal Reserve and its decisions not to cut interest rates as quickly as he would prefer.
Mr Powell said in a video statement that the threat of criminal charges undermined the Fed’s role and questioned whether monetary policy will in future be “directed by political pressure or intimidation”.
The news stoked fears that threats to the independence of the central bank were becoming more severe.
While gold prices soared, the US dollar was weakening against key currencies.
The pound was up by nearly 0.5% against the US dollar on Monday morning, to 1.346.
The euro was also up by about 0.4% against the US dollar, at 1.168.
Susannah Streeter, chief investment strategist at Wealth Club, said Wall Street has been “rattled by what’s being viewed as another assault on the independence of the US Federal Reserve”.
“It certainly marks a sharp escalation in the Trump administration’s criticism of the Fed and is unnerving investors given that an independent central bank is considered to be crucial to maintaining sound monetary policy, especially at a time when the mounting US debt pile is coming under scrutiny,” she said.
Chris Beauchamp, chief market analyst at IG, said the dispute “represents a major crisis for markets and has the potential to restart worries about the dollar and US monetary policy”.
The UK’s FTSE 100 took a step back after enjoying a run in recent weeks, having hit new record highs and surpassing the milestone 10,000 mark for the first time.
It was more or less flat by mid-morning on Monday at about 10,123 points.