Analyst: Some Investors Rely on Gold to Hedge Inflation

Analysts at RBC noted that President Trump's pressure on the Federal Reserve, the questioning of the Fed's independence, and his power to dismiss Powell all add uncertainty to an already uncertain market. JPMorgan's Chief US Economist Michael Feroli stated that any potential impairment of the Fed's independence could introduce upside risk to the inflation outlook, which is already under upward pressure from tariffs and rising inflation expectations. Some investors rely on gold as a tool to hedge against inflation. According to Standard Chartered Bank, in the first quarter of this year, investors poured at least $19 billion into gold ETFs. Mitul Kotecha, Head of Asia FX and EM Macro Strategy at Barclays, stated that there does appear to be some fund inflow into gold, with many investors buying gold.