Recent gold rally is not only driven by a weakening USD but also reflects a shift in market expectations.

The easing of geopolitical tensions is creating a dual effect: capital flowing back into risk assets (stocks), while at the same time opening the possibility for the Fed to change its stance.

Previously, the market had almost “priced out” the scenario of interest rate cuts this year. However, if geopolitical pressures continue to ease, expectations for easing could return very quickly.

The key point lies in real yields. As the market begins to price in a more dovish Fed, declining real yields will become an important catalyst supporting gold.

However, the upside for gold has not yet truly “expanded.” If inflation shows signs of returning, the Fed will be forced to keep interest rates high for longer — this is the biggest obstacle.

👉 In summary: Gold is caught between two opposing forces — easing expectations (bullish) vs. inflation risks (bearish). The upcoming trend will depend on which scenario the market believes more strongly.

Which side do you belong to?