London (AFP) - The dollar mostly weakened and gold hit a record high Monday as investors digested news that the US Justice Department is probing the Federal Reserve, raising fears over the central bank’s independence against President Donald Trump’s push for lower rates.

Wall Street’s main indices opened lower, with Briefing.com analyst Patrick O’Hare saying “market participants may be using this compendium of news as an excuse to take some profits following a hot start to 2026…”

Most stock markets have enjoyed a solid start to 2026, with indices in Frankfurt, London, Paris and Seoul hitting record highs last week, largely on optimism for the tech sector and gains in defence sector shares.

European stocks edged higher after a strong showing in Asia.

Fed Chair Jerome Powell confirmed the “unprecedented” subpoenas against the bank in a rare video address on Sunday, which he blasted as part of Trump’s pressure campaign for aggressive rate cuts.

“The probe has unnerved markets and raised questions about what might happen to the Fed once Powell steps down in May,” said Russ Mould, investment director at AJ Bell.

“There is a fear that Trump is meddling too much with policies that are meant to be set independently,” he added.

“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 his statement.

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

The Fed has indicated it will hold interest rates steady at its next monetary policy meeting this month.

The dollar fell against major peers, as did the price of the benchmark 10-year US Treasury bond, sending its yield slightly higher.

Gold climbed close to $4,600 an ounce while silver approached $85 an ounce as investors sought traditional safe havens.

“Beyond monetary and political concerns, gold remains well supported by ongoing geopolitical risks,” said Forex.com analyst Fawad Razaqzada.

“While tensions had eased somewhat in recent weeks, the latest flare-up involving Iran has reintroduced a fresh layer of uncertainty,” he added, pointing to the risk of renewed US involvement in the region.

Trump said Sunday that he was considering military action against Iran following reports of hundreds of deaths during a violent crackdown on the protesters.

“We’re looking at it very seriously,” Trump told reporters on Air Force One. “The military is looking at it, and we’re looking at some very strong options.”

Oil prices dipped in volatile trading Monday despite protests in Iran and the US seizure of Venezuela’s crude supplies stoking geopolitical risks.

Asian markets advanced Monday, led by gains in Hong Kong and Shanghai and tracking Wall Street’s record close at the end of last week.

Tokyo was closed for a holiday.

- Key figures at around 1430 GMT -

New York - Dow: DOWN 0.6 percent at 49,195.78 points

New York - S&P 500: DOWN 0.4 percent at 6,935.99

New York - Nasdaq Composite: DOWN 0.4 percent at 23,579.57

London - FTSE 100: UP 0.1 percent at 10,

Paris - CAC 40: UP 0.2 percent at 8,374.71

Frankfurt - DAX: UP 0.5 percent at 25,381.93

Hong Kong - Hang Seng Index: UP 1.3 percent at 26,608.48 (close)

Shanghai - Composite: UP 1.1 percent at 4,165.29 (close)

Tokyo - Nikkei 225: (closed for holiday)

Euro/dollar: UP at $1.1677 from $1.1635 on Friday

Pound/dollar: UP at $1.3463 from $1.3407

Dollar/yen: UP at 158.01 yen from 157.88 yen

Euro/pound: DOWN at 86.71 pence from 86.78 pence

Brent North Sea Crude: DOWN 0.2 at $63.20 per barrel

West Texas Intermediate: DOWN 0.3 percent at $58.95 per barrel

burs-rl/jh