Trade Optimism Boosts Dollar and Pressures Gold Despite Ongoing Geopolitical Conflicts

Gold trades steady at $4,200 as the Fed prepares a hawkish rate cut Wednesday. Global central banks are pumping the brakes on easing, while persistent inflation keeps Americans struggling with soaring costs for food, housing, and childcare—fueling safe-haven demand.

Federal Reserve Chair Jerome Powell is set to deliver another rate cut this week despite growing dissent among policymakers. Meanwhile, China’s central bank extended its gold buying streak to 13 consecutive months, even as prices trade near record highs. State Street Global Advisors sees a potential path for gold to reach $5,000 per ounce in 2026, driven by Fed easing, record central bank buying, and surging ETF inflows. Harvard University just tripled its Bitcoin stake while doubling down on gold—allocating 2-to-1 in what one analyst called a “debasement trade.” As banking regulators roll back post-crisis lending restrictions, institutional investors are positioning for a new regime of easy money and rising systemic risks.

Markets are holding their breath ahead of today’s delayed PCE inflation report—the Fed’s preferred gauge and final data point before next week’s rate decision. Gold is consolidating near $4,235 while silver holds near record highs after hitting $58.98 this week. Meanwhile, Treasury bonds are suffering their worst week since June as yields climb on inflation concerns. Consumer sentiment remains stuck near multi-year lows, with Americans anxious about job security despite Fed rate cut expectations.