Gold prices climbed 0.9% to $3,231 an ounce, regaining ground after last week’s 2% drop. The rally came despite rising yields, as traders viewed the downgrade and political uncertainty as bullish for hard assets. A decisive break above the $3,238.38 resistance could trigger momentum toward $3,277.91 and potentially $3,310.48. Goldman Sachs maintained its year-end gold forecast at $3,700/oz, citing long-term fiscal concerns and global policy risk.
Fed Policy Outlook Clouded by Fiscal Risks and Market Volatility
Speeches from Fed officials, including Bostic and Williams, are now in focus as traders assess whether yield levels might substitute for further tightening. With inflation expectations still anchored, the Fed may pause, but growing debt-servicing burdens and rising risk premiums complicate the outlook.
Market Forecast: Bearish Dollar Bias to Persist
The dollar faces continued downside pressure as Moody’s downgrade adds credibility to fiscal alarm bells already ringing across bond and currency markets.
With Treasury yields elevated and global demand for safe assets shifting toward gold and the yen, traders should expect near-term DXY softness—especially if trade policy volatility persists and Fed signals remain neutral. Risk sentiment favors further gold upside and continued dollar repricing.
More Information in our Economic Calendar.
