The interest on US dollars and government bonds affects the gold price
The broad-based strength of the US dollar has boosted gold sales as a stronger dollar makes gold more expensive for international buyers. Rising US Treasury yields, underpinned by inflation expectations linked to Trump’s policies, are also weighing on gold.
Minneapolis Fed President Neel Kashkari recently noted that the central bank is looking for more substantive evidence that inflation will reach the 2% target before considering additional rate cuts, signaling a cautious approach.
Global economic concerns provide limited support for gold
While Trump’s fiscal policy aims to stimulate the US economy, his proposal for a 10% tariff on imports from all countries has raised concerns about a possible global trade conflict.
Such protectionist measures could disrupt international trade and provide limited support to gold as investors look for safe-haven assets amid uncertainty.
The market is waiting for important economic data and speeches from the Fed
Looking ahead, investors are looking at this week’s US inflation data and producer price index as these numbers could shape the outlook for interest rates and thus the price of gold.
In addition, speeches from several Federal Reserve officials, including Fed Chairman Jerome Powell, are expected to provide insight into the central bank’s approach to future interest rate movements.