Could #Gold Have Peaked in Its Cycle ? The Market Is Beginning to Price a More "hawkish" Fed

After a historic price surge in the first year of President Trump's second term, gold is showing signs that the peak of its rally may be behind us. This shift isn't due to weakening demand for gold, but rather to expectations regarding the Fed's monetary policy.
One-year Fed Funds Futures contracts are beginning to reflect the possibility that the Fed will have to return to a more hawkish stance in the future.
- The Fed has cut interest rates in 2025 despite the stock market continuously reaching record highs and inflation remaining significantly above its 2% target.
- Meanwhile, the yield on 30-year US Treasury bonds remains above 5%, its highest level since 2007.
Our question now is: why hold a non-cash-generating asset like gold when US government bonds are offering the most attractive real yield in nearly two decades?
In fact, the valuation ratio between gold and bonds has reached its most extreme level since the late 1980s. If inflationary pressures return from:
- Sharply rising #oil and energy prices.
- Escalating global transportation costs.
- Supply chain disruptions due to geopolitical conflicts.
The Fed may be forced to maintain interest rates higher than expected or even consider returning to a rate hike cycle. This is typically an unfavorable environment for gold in the short term.
Therefore, the current narrative may not be the "end of the gold bull market," but rather a transition from a liquidity-driven rally to a monetary policy-driven revaluation phase.
📊 In the short term, bond yields and the US dollar may be gold's biggest rivals. In the long term, gold remains one of the most important strategic assets in the restructuring of the global financial system.