Surprisingly, his words pushed the dollar to its lowest level since February 2022. Therefore, the weaker dollar made Gold more attractive for investors looking for safe-haven assets.

Normally, a strong dollar attracts safe-haven buyers, but this time the dollar’s drop actually gave a boost to the Gold prices. Traders are now considering the weaker dollar as one of the main reasons behind Gold rise.

Geopolitical Tensions Boost Safe-Haven Demand

Apart from the weaker dollar, ongoing geopolitical tensions was seen as another key factor that helped gold to reach all time high. As we know, President Trump  recently threatened to take control of Greenland, impose tariffs on Europe. He also warned that Canada could face 100% tariffs if it signs a trade deal with China. As a result, demand for Gold, seen as a safe-haven asset, has increased significantly.

Fed Decision in Focus for Markets

On the other hand, investors are closely watching the Federal Reserve’s interest rate decision scheduled on Wednesday. However, the Fed is expected to keep interest rates unchanged in the 3.50% to 3.75% range after cutting rates at three straight meetings late last year.

Hence, markets will pay close attention to Fed Chair Jerome Powell’s press conference. Any hawkish signals could limit further losses in the US dollar and weigh on Gold prices. In contrast to this, any dovish remarks could extend Gold’s rally even further.

Gold Price Forecast: XAU/USD Holds $5,235 as Bullish Channel Targets $5,410 Next