Gold Rises Due To Conflict

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Gold Rises Due To Conflict

Gold Rises Due To Conflict Between Fed And White House

Commerzbank's analyst had an interesting take on why Gold is rising. They believe that the reason behind the rise in Gold prices is mainly due to the ongoing conflict between the Federal Reserve and the White House.

At the time of writing this, Gold is already at multi-week highs, while the long-term trend is also bullish. Looking ahead, further rate cuts will only increase the appeal of Gold in the investor's eyes.

More Rate Cuts Are Coming

The chances of more rate cuts from the Federal Reserve continue to increase with each passing day. By the end of 2025, experts believe that around 50 bps worth of rate cuts will happen.

So, the chances of more rate cuts along with the ongoing conflicts between the Fed and White House have pushed the Gold prices higher. The overall scenario couldn't be any better for Gold as the US is now shifting towards a dovish monetary policy.

To add fire to the fuel, the US president dismissed the Fed Governor Cook. In turn, Ms. Cook has filed a lawsuit against the dismissal, which has further escalated the conflict.

Experts believe that the ongoing tension will only weaken the independence and the reputation of the Fed. In addition, the US Vice President is also passing remarks on how the government should have a say in the Fed's decisions.

It seems that the US government now wants its own input in the Fed's decision. In simple words, they want the US Federal Reserve to do as dictated by the US government.

If that happens, it would end the independence of the Federal Reserve and would also radically shift the US monetary policy. However, this uncertainty has become the ideal situation for Gold and the Gold ETFs.

Looking ahead, Gold can attempt to claim the $4,000 level as the US Dollar is expected to weaken in the coming months.

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