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Gold News: Is Dedollarization Fueling the Next Stage of the Gold Rally?
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Key Points:
- Gold soared to a record $3,245.49 last week, gaining $200 in five days on crisis-driven safe-haven flows and inflation fears.
- A rare selloff in both the dollar and Treasuries signals crumbling investor confidence in U.S. financial leadership.
- Escalating U.S.-China tariffs could push inflation to 4–5%, reigniting strong demand for gold as a hedge.
Gold Prices Forecast: Fundamentals Drive Bullish Momentum as Crisis Fears Deepen
Gold surged last week, with XAU/USD settling at $3,237.93 after touching a record high of $3,245.49. The metal gained $200.05 on the week, or 6.59%, marking one of its strongest performances this year.
The rally reflects an intense wave of safe-haven buying driven by deepening macro instability, fading confidence in U.S. fiscal management, and renewed trade tensions.
As global markets reprice risk, gold has reasserted its role as the preferred store of value. This weekly recap breaks down the key drivers behind the move and the outlook ahead.
Trade War Escalation Reignites Inflation Risk
The U.S.-China trade conflict escalated sharply, jolting markets and fueling inflation concerns. Washington’s latest tariff hike raised duties on Chinese goods to 145%, prompting a swift 125% countermeasure from Beijing.
Combined with new levies from the EU and Canada, these developments are expected to push input costs higher across the global economy. Economists now warn that inflation could accelerate toward 4–5%, reversing recent disinflationary trends.
These risks are pushing capital into gold as a hedge against sustained price pressure.
Dollar and Treasury Markets Signal Loss of Confidence
Gold’s move is being amplified by a rare tandem selloff in both the dollar and U.S. Treasuries. The dollar index closed the week below 100, its weakest level since 2022, while 10-year yields surged to 4.49% and 30-year yields climbed to 4.87%.
These shifts signal growing unease over U.S. fiscal sustainability and a rapid move away from dollar-denominated assets. As Allianz noted, “confidence is cracking”—and gold is where capital is seeking cover.
Fed Policy Outlook Complicated by Stagflation Risk
While recent producer price data showed a monthly drop, tariffs are expected to reignite inflation, complicating the Federal Reserve’s path forward. Markets now price in up to 100 basis points of rate cuts by year-end.
Yet with inflation and growth pulling in opposite directions, the Fed faces limited room to maneuver. This unresolved policy tension adds to gold’s appeal, especially in an environment where traditional safe havens are under pressure.
Institutional Demand Strengthens Fundamental Case
Gold-backed ETF inflows accelerated last week, and central banks—particularly in emerging markets—continue to boost their gold holdings. These structural reallocations reflect a broader trend of reducing reliance on the U.S. dollar and insulating against geopolitical risk. Institutional flows are now a key pillar of support for the rally, reinforcing gold’s position in strategic portfolios.
Gold Market Forecast: Bullish with Institutional and Policy Drivers in Control
With gold closing the week at a record high and gaining over 6.5%, the outlook remains firmly bullish. Rising inflation risk, a weakening dollar, and growing central bank demand continue to support upward momentum.
Unless there is a meaningful resolution to trade tensions or a recovery in confidence in U.S. fiscal policy, gold is likely to remain in demand. The metal’s role as a macro hedge is being reaffirmed week after week—and for now, the fundamental drivers remain firmly in its favor.
More Information in our Economic Calendar.
About the Author
James Hyerczykauthor
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.
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