Thu Lan Nguyen, head of commodity research at Commerzbank, suggests that the precious metal’s relative strength reflects a growing hedge against political instability. While the market currently prices in a 90% probability of a Federal Reserve rate hike, the intensifying pressure from President Donald Trump—who has openly lobbied for lower rates and threatened institutional interventions—is creating a unique risk premium for the U.S. dollar.

This shift in sentiment follows a volatile year where expectations for rate cuts were dismantled by inflation spikes linked to Middle East tensions and energy supply disruptions. As the Federal Reserve remains cornered by persistent inflation and political threats, investors are increasingly questioning the long-term safety of sovereign bonds. Commerzbank maintains a bullish long-term outlook, noting that gold’s appeal as an institutionally independent asset remains intact. Despite a recent forecast adjustment to $4,500 per ounce for year-end, the bank views the structural skepticism toward the dollar as a permanent floor for gold prices.