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Last week, XAU/USD settled at $3327.37, up $89.45 or +2.76%.
Fed Independence Under Scrutiny Amid Trump-Powell Clash
Market focus sharpened on political interference risks after former President Trump threatened to remove Federal Reserve Chair Jerome Powell. The clash has rattled investor confidence, reviving debate over central bank independence. Historically, similar tensions have driven demand for gold as a hedge against institutional instability. Legal questions over Powell’s tenure only add to market uncertainty.
Tariff Escalation Sparks Safe-Haven Rotation
The Biden and Trump administrations both appear intent on expanding tariff frameworks, with recent actions targeting critical mineral imports and strategic sectors such as semiconductors and pharmaceuticals. These moves have heightened geopolitical stress and raised inflation concerns. As trade relationships come under strain, investor preference continues to tilt toward safe-haven assets like gold.
Rate Policy Stalemate Reinforces Gold’s Appeal
The Federal Reserve remains cautious, with officials calling for more data before shifting policy. Still, markets are increasingly pricing in rate cuts, driven by signs of slowing growth and persistent inflation risks. Gold stands to benefit either way: easing policy reduces the opportunity cost of holding non-yielding assets, while delayed action in the face of inflation preserves gold’s role as a hedge.
Dollar Weakness and Central Bank Demand Add Tailwinds
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