Gold rallied sharply on the back of these developments, touching a record $3,086.97 and posting its fourth straight weekly gain. The inflation hedge narrative is reasserting itself as real yields stay low and macro uncertainty increases.
Fed Stance Offers Little Relief for Bears
The Federal Reserve held rates steady and signaled a dovish tilt, with futures pricing in 63 basis points of cuts by year-end. Policymakers, including Governor Adriana Kugler and Richmond Fed’s Thomas Barkin, noted stalled progress on inflation and policy visibility. Traders remain focused on the Fed’s next move, but the hotter-than-expected PCE data will likely delay immediate action, keeping real yields compressed—a bullish backdrop for bullion.
Geopolitical and Recession Risk Deepen Bullion Appeal
Markets are also reacting to geopolitical uncertainty and growing recession expectations. A CNBC CFO Council survey shows 60% of U.S. CFOs now expect a recession by year-end, up from just 7% last quarter. Trade tensions top their concerns, followed by inflation and declining demand. Equity risk appetite is fading, with only 35% of CFOs planning increased capex, reinforcing gold’s role as a defensive asset.
Gold Prices Forecast: Fundamentals Point to Ongoing Safe-Haven Demand
With tariff-driven inflation concerns building, recession fears growing, and the Fed maintaining a cautious stance, the fundamental outlook for gold remains supportive. Geopolitical risk, weak business sentiment, and policy uncertainty continue to drive safe-haven demand. Unless macro conditions improve materially, the fundamental case for gold stays strong going into next week.
