Gold Price Rally: Safe-Haven Strength or Overheating Risk?

Gold has surged 30% year-to-date in 2025, reaching a record high above $3,490 per ounce. The rally stems from eroded confidence in U.S. monetary policy after a controversial attempt to remove Federal Reserve Governor Lisa Cook, driving investors toward non-counterparty assets.

Spot gold holds steady NEAR $3,400, with futures trading in the mid-$3,440s, reflecting sustained demand. An 85% probability of September rate cuts per CME FedWatch Tool reduces gold's opportunity cost, while dollar weakness amplifies its appeal for international buyers.

ETF inflows and central bank acquisitions continue to support prices, compounded by speculative positioning as macro traders hedge against political uncertainty. The Fed governance crisis has particularly undermined trust in dollar-denominated assets, accelerating gold's ascent as an institutional SAFE haven.