Silver hits record high at $84.60/oz

Fed chair Jerome Powell under criminal investigation

US, Iran threaten strikes after Iranian protests

Jan 12 (Reuters) - Gold hit a record high of $4,600 on Monday, while silver also set a new peak, as a criminal probe by the Trump administration into Federal Reserve Chair Jerome Powell sent investors back into the asset viewed as a safe haven.

Spot gold XAU= jumped 2%, hitting a record high of $4,609 per ounce by 0818 ET. U.S. gold futures GCcv1 for February delivery gained 2.6% to $4,619.8.

"With the Fed's independence now openly contested, the 'political risk' discount usually reserved for emerging markets is bleeding into the U.S. dollar, driving investors toward hard assets," said Zain Vawda, analyst at MarketPulse by OANDA.

Wall Street futures dropped and the dollar fell by the most in three weeks as tensions between the Fed and the Trump administration escalated. USD/ MKTS/GLOB

Powell said the threat to indict him over Congressional testimony he gave last summer was a "pretext" for the Trump administration to gain more influence over interest rates, which the U.S. President wants cut dramatically.

Brokerages including Goldman Sachs and Morgan Stanley expect two 25-basis-point rate cuts each in June and September.

Trump said he is also weighing a range of strong responses including military options to a crackdown on Iranian protests.

Iran's unrest comes as Trump flexes U.S. muscles internationally, having ousted Venezuela's Nicolas Maduro as president and discussing acquiring Greenland.

Non-yielding assets like gold tend to do well in a low-interest-rate environment and during geopolitical or economic uncertainty.

Spot silver XAG= rose 6.8%, hitting an all-time high of $85.38 per ounce.

"The path (for silver) is open toward $90 and potentially $100 per ounce if the industrial squeeze tightens. Looking at the gold-to-silver ratio which is narrowing, this usually suggests silver has more room to run than gold in percentage terms," Vawda said.

Spot platinum XPT= climbed 3.5% to $2,352.90 per ounce after scaling a record high of $2,478.50 on December 29.

Palladium XPD= gained 2.5% to $1,860.43 per ounce.