Gold prices increased due to a decline in the US dollar and Treasury yields. Political pressure has intensified on the Federal Reserve with calls for aggressive rate cuts from former President Trump, creating concerns about the central bank's independence. Geopolitical tensions, especially in Eastern Europe and changes in US trade policy, have led to heightened safe-haven demand, particularly for gold. While there was a reported net purchase of 20 tonnes by central banks in May, slower buying reduces market influence. ETF inflows also shrank significantly, indicating potential downside risks for gold prices ahead.
Gold prices rose on Wednesday, bolstered by a decrease in US dollar strength and Treasury yields, indicating safe-haven demand amidst geopolitical tensions.
Political pressure on the Federal Reserve intensifies as calls for aggressive rate cuts from former President Donald Trump raises concerns about monetary independence.
Increased geopolitical risks linked to US aid to Ukraine may drive more investment into gold as a protective asset, reflecting caution in market sentiment.
Central banks recorded net purchases of 20 tonnes in May, although the overall buying pace is less than prior years, limiting market influence.
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