Gold rises as dollar and yields retreat

16 July 2025

Today market analysis on behalf of Bas Kooijman is the CEO and Asset Manager of DHF Capital S.A

Gold prices climbed on Wednesday, supported by a retreat in both the US dollar and Treasury yields. Market sentiment remains affected by renewed political pressure on the Federal Reserve, as former President Donald Trump reiterated his call for aggressive rate cuts, raising concerns over central bank independence.

Safe-haven demand could continue to support the market, with geopolitical tensions in Eastern Europe and evolving US trade policy keeping investors cautious. The announcement of additional US aid to Ukraine has heightened geopolitical risks, potentially driving further inflows into gold as a protective asset.

Central bank buying could also continue to lend support, with net purchases of 20 tonnes reported in May. However, the pace of buying is more subdued than in previous years, limiting the impact on the market to a certain extent.

ETF flows present a more cautious picture. Net inflows shrank to just 1.3 tonnes in the week ending July 11th. Limited or negative ETF flows in the coming weeks could expose gold to downside risks, especially if upcoming economic data, including today’s PPI report, further curtail expectations around interest rate cuts.