Gold is seeing a new round of gains as safe-haven demand heats up, driven by trade tensions and concerns about the independence of the Federal Reserve. Gold climbed to a five-week high on Tuesday, extending Monday's gains, while benefiting from a weaker dollar and falling U.S. Treasury yields.
Trade negotiations and Fed independence are in the spotlight, supporting gold gains
The uncertainty of trade tensions remains a core factor supporting gold's safe-haven status as the EU and the U.S. are increasingly unlikely to reach an agreement before the August 1 trade deal deadline.
Another driver of market unease is the re-emergence of doubts about the independence of the Federal Reserve. The market expects a rate cut of only 4.7% in July, reflecting doubts about Powell's deviation from the current 4.25%-4.50% interest rate range, despite the belief that inflation caused by tariffs is temporary.
The Fed's independence from political interference is a core pillar of its credibility. When this independence is questioned, investors worry that monetary policy may no longer be data-driven but influenced by other factors, undermining confidence in the dollar.
The upward space of gold is partially limited by the game of multiple factors. Although gold has traditionally benefited from economic uncertainty and risk aversion, with the improvement of regulatory transparency and the increase of institutional interest in Bitcoin, some safe-haven funds have flowed from gold to this alternative asset; the trend of these funds flowing to alternative assets still poses resistance to gold. However, the continued existence of geopolitical risks, coupled with the continued purchase of gold as a reserve asset by central banks of various countries, still provides long-term support for the gold market.
GOLD XAUUSD XAUUSD XAUUSD XAUUSD XAUUSD
Trade negotiations and Fed independence are in the spotlight, supporting gold gains
The uncertainty of trade tensions remains a core factor supporting gold's safe-haven status as the EU and the U.S. are increasingly unlikely to reach an agreement before the August 1 trade deal deadline.
Another driver of market unease is the re-emergence of doubts about the independence of the Federal Reserve. The market expects a rate cut of only 4.7% in July, reflecting doubts about Powell's deviation from the current 4.25%-4.50% interest rate range, despite the belief that inflation caused by tariffs is temporary.
The Fed's independence from political interference is a core pillar of its credibility. When this independence is questioned, investors worry that monetary policy may no longer be data-driven but influenced by other factors, undermining confidence in the dollar.
The upward space of gold is partially limited by the game of multiple factors. Although gold has traditionally benefited from economic uncertainty and risk aversion, with the improvement of regulatory transparency and the increase of institutional interest in Bitcoin, some safe-haven funds have flowed from gold to this alternative asset; the trend of these funds flowing to alternative assets still poses resistance to gold. However, the continued existence of geopolitical risks, coupled with the continued purchase of gold as a reserve asset by central banks of various countries, still provides long-term support for the gold market.
GOLD XAUUSD XAUUSD XAUUSD XAUUSD XAUUSD 
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