Fed Hawkishness Meets Supply Chain Overhaul in Gold Market

Gold prices are under pressure from hawkish signals delivered by Fed Chair Kevin Warsh, leading to a 0.4% drop in spot gold to $4,436.26 per ounce on Monday. The ten-year yield has pushed above 4.75%, its highest level since January 2025, which is a headwind for gold as it makes government bonds more attractive.

The escalation of the conflict in the Gulf has also had an impact on gold, with Brent crude prices above $90 per barrel and West Texas Intermediate at roughly $85.66. This cuts both ways for gold, feeding inflation anxieties but also reviving the classic bid for safe-haven assets.

Despite this short-term pressure, the structural bull case for gold remains intact due to the US government's balance sheet. The national debt has exceeded $40 trillion, and analysts frame this as a case of fiscal dominance that provides a foundation for higher gold prices over a multi-month horizon.