Gold’s Resilience Amid U.S. Dollar Weakness
Friday, June 13th 2025
Despite recent setbacks in the gold market, State Street Global Advisors’ Chief Gold Strategist, George Milling-Stanley, remains optimistic about the precious metal’s potential. With the U.S. dollar struggling to gain ground amid economic uncertainty, gold could stand to benefit significantly.
Inflation and Economic Instability Boost Gold’s Appeal
According to Milling-Stanley, fluctuating trade and tariff policies in the U.S. are contributing to economic instability, creating fertile ground for rising inflation. This, he suggests, could bolster gold’s attractiveness as a hedge against a weakening dollar.
Gold Prices Take a Hit as Trade Sentiment Improves
Recent progress in U.S.-China trade talks has temporarily dampened demand for safe-haven assets, sending gold prices tumbling. Spot gold dropped to $3,186.40 per ounce, a 2% decline in one day, reaching its lowest point in five weeks. This decline represents a 9% drop from last month’s high of $3,500 per ounce.
Dollar Volatility Keeps Gold in Play
Despite the selling pressure, Milling-Stanley remains bullish on gold, noting that the U.S. dollar is not capitalizing on positive trade news. The dollar index hovered around 100.94 points but continues to exhibit volatility. “Under current economic policies, I don’t expect the dollar to strengthen anytime soon,” he stated.
Federal Reserve’s Policy and Gold’s Outlook
Higher inflation would typically prompt the Federal Reserve to tighten monetary policy, which could support the U.S. dollar. However, with economic growth slowing, the central bank is adopting a more cautious stance. Market expectations are leaning toward a potential rate cut this summer, which could further weaken the dollar and drive investors toward gold.
Recession Concerns Keep Safe-Haven Demand Intact
While Milling-Stanley is uncertain about a looming recession, he notes that many investors continue to seek gold for its protective qualities. “Investors are buying gold not for quick gains but for its long-standing protective attributes,” he explained. With a proven track record as a hedge against inflation, market instability, and geopolitical tensions, gold remains a key asset for those seeking stability amid economic uncertainty.
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