Will gold keep rising when the Fed raises interest rates?
The real yield on US bonds is no longer an absolute drag on the upward momentum of gold. Although, in terms of traditional financial theory, a tightening monetary policy and high interest rates from the US Federal Reserve (Fed) would create downward pressure on non–interest-bearing assets, in reality the market is being driven by stronger structural forces. Below are 8 key arguments explaining why gold’s long-term uptrend remains intact even in the scenario where the Fed continues to raise interest rates.
DRIVING FORCES SUPPORTING THE RISING TREND OF GOLD
Amid rising geopolitical risks and the complex fluctuations of the global macroeconomy, gold $XAUT continues to affirm its position as a core hedging asset channel for large funds. 1. Geopolitical tensions and inflation pressures The escalation of conflict in the Middle East, especially the risk of disruptions to energy supplies through the Strait of Hormuz, is pushing diesel oil prices to record highs. Transportation and production costs have risen sharply, creating fresh inflationary pressure worldwide. This trend directly drives demand for value-protecting assets, in which gold $XAUT plays the top priority role.
MIDDLE EAST TENSIONS, INFLATION PRESSURE, AND ASSET TRENDS
Geopolitical developments in the Middle East remain the focus of attention for global financial markets. The escalation of conflict, along with sharp fluctuations in strategic commodities, is creating a widespread wave of impact on investment capital flows. 1. Middle East conflict and energy supply chain risks The U.S. military has taken action to attack tankers associated with Iran in the Strait of Hormuz area. This is a serious military escalation, posing a direct threat to the world's vital oil and gas shipping routes. Relations between the two sides continue to stall as Iran does not accept unfavorable negotiation terms and tends to prolong tensions in order to target the midterm election period in the United States.
WHY GOLD AND REAL ASSETS WILL TAKE THE LEAD—MOVING FORWARD IN THE NEXT 10 YEARS?
The “exporting inflation” mechanism of the United States—financial leverage that has maintained the USD’s unrivaled dominance for decades—now faces unprecedented structural cracks. Below are key takeaways on the shifting global monetary order and perspectives on long-term portfolio management. 1. Weakening USD leverage & The Cracks in the Petrodollar Record public debt: US public debt has exceeded the $40 trillion mark, with annual budget deficits continually swelling. Persistent high core inflation (Core PCE) is eroding the purchasing power of the USD over the long term.
BỌC LÓT NỢ CÔNG MỸ, CĂNG THẲNG ĐỊA CHÍNH TRỊ VÀ TÁC ĐỘNG ĐẾN THỊ TRƯỜNG TÀI SẢN MÃ HÓA
1. The U.S. public debt crisis and pressure on Treasury bond yields The U.S. public debt has officially surpassed the $40 trillion mark, reflecting an ongoing inflation in the scale of the fiscal burden. The direct consequence is that the yields on U.S. government bonds with maturities of 10 and 30 years have been pushed to record highs, approaching and even exceeding the peaks seen during the 2007–2008 financial crisis. Countries holding large amounts of debt, such as Japan, China, and the UK, continue the trend of reducing the proportion of U.S. Treasury bonds in their reserves, shifting capital flows toward safer assets like gold.