Similar to other commodities, gold prices usually escalate when the US dollar weakens. Hence, during periods when the dollar is losing value, the likelihood of an increase in gold prices is notably high. Unfortunately, although the US Dollar index has retraced from its recent high, it has still made around 10% gains since late 2022.

Yet experts still predict that gold will maintain its stable upward trajectory throughout the latter half of this year. This is due to sustained interest from investors, central banks, and regular purchasers amid an atmosphere of economic instability, recession apprehension, and geopolitical unrest.

“The core PCE, which is what the Fed really looks at, came in line with estimates. It really wasn’t much of a surprise. Also, the dollar is weaker today and is giving a bit of a boost for gold,” said Edward Meir, a metals analyst who provides research for Marex.

“I think the Fed does not really mind seeing the stronger data as long as the inflation numbers continue to come down. The Fed is probably done raising rates and I would in general be inclined to buy the dips on gold,” Meir added.

These experts are probably not wrong. Gold prices do feel like they are comfortable at the higher prices we have seen recently.

Improved economic indicators have lessened recession fears, subsequently drawing investors towards the US Dollar Index. Yet, the persistent hardline approach to monetary policy by key central banks could negatively impact the global economy. This scenario could potentially bolster the value of precious metals in the immediate future.