Tianfeng: Gold surges to $3600, there is still room for further upside this year.

Tianfeng released a research report stating that the gold market has not ended yet, and there is still room for upward movement within the year. The four major factors that are driving up the price of gold are expected to continue throughout the year: First, the independence of the Federal Reserve is a key point in the fourth quarter. Second, the expectation of interest rate cuts may continue. Third, the uncertainty of tariffs is difficult to resolve, and if IEEPA tariffs are blocked due to legality, the White House is expected to expand the range of industry tariffs. Fourth, the long-term trend of "de-dollarization" continues, with official institutions of various countries increasing their holdings, providing a fundamental support for gold demand. It is expected that under the macro background of this year, the demand for gold from the private sector will remain strong, and gold ETFs will continue to attract funds, supporting the price of gold to reach new highs. Tianfeng's main points are as follows: Spot gold reaches a new high, with futures gold hitting $3,600 per ounce. As of September 2, 2025, gold has risen for 6 consecutive trading days, with spot gold hitting a new high; New York gold futures have surged to $3,600, up 36% since 2025. Gold and silver have been the best performing assets this year, significantly outperforming major global equity assets and leading other commodities by a wide margin. The four driving factors for gold hitting $3,600 are as follows: 1. The crisis of the Federal Reserve's independence Since August, concerns about the independence of the US monetary policy have significantly increased. On August 26, Trump said that he will soon have a "majority" of appointees on the Federal Reserve Board. If the independence of the Federal Reserve is lost, it could lead to increased stagflation risk, exacerbated debt issues and fiscal concerns, a weakening of the dollar's status, capital flight, etc. The three major U.S. markets of stocks, bonds, and the dollar are shifting funds towards safe-haven assets. Trump has intervened to a greater or lesser extent in almost all 7 positions on the Federal Reserve Board. 2. The increasing expectations of interest rate cuts by the Federal Reserve, leading to a decline in interest rates The increasing expectations of interest rate cuts by the Federal Reserve are also one of the main reasons for the recent rise in gold prices. Since 1980, during the 10 interest rate cutting cycles (including the current one that started in September 2024), gold has risen 7 times. Gold is a non-yielding asset, so when interest rates fall, the return on bonds and other yielding assets falls, reducing the opportunity cost of holding gold and increasing demand for it. The current market expects a 91.7% probability of a 25bp rate cut in September, compared to only 75% before the JH meeting on August 22. 3. Geopolitical and economic uncertainty, demand for safe havens In terms of tariff policies, on August 29, a federal appeals court ruled that Trump's tariffs imposed under the IEEPA were illegal, which could overturn Trump's "equivalent tariffs" on other countries, the 10% baseline tariffs globally, and the tariffs imposed on China and Mexico under the pretext of fentanyl and border issues. Trump said he would soon appeal to the Supreme Court. Industry tariffs are also constantly threatening, as Trump has repeatedly stated that he will impose hefty additional tariffs on industries such as pharmaceuticals, furniture, and the semiconductor chip industry. In addition, the exemption of low-value parcels from tariffs has been canceled, and U.S. officials have stated that a unified tariff of $80 to $200 will be imposed on small parcels. In addition to tariffs, tightening measures in the "Big Beautiful Act" such as tightening health insurance, student loans, and other social welfare measures, government layoffs and spending cuts, and stalled negotiations in the Russia-Ukraine conflict have fueled market concerns about future uncertainties. 4. Confidence in the dollar and U.S. bonds is faltering, with central banks around the world purchasing gold The first three factors are the catalysts for the recent rise in gold, while the fourth factor, "de-dollarization," has been the underlying support for gold's rise in the past two years. Due to record purchases by central banks worldwide, gold has surpassed the euro since 2024, becoming the second largest reserve asset for central banks globally, second only to the dollar. As uncertainty in U.S. policies rises, fiscal concerns deepen, and especially recently, Trump's "vision" of creating fiscal revenue through tariffs is also being challenged. Confidence in the dollar and U.S. bonds is wavering, "de-dollarization" is accelerating, and this is boosting demand for gold. Outlook for gold prices The gold market has not ended yet, and there is still room for upward movement within the year. The four major factors driving up gold prices are expected to continue throughout the year: First, the key point will be whether the independence of the Federal Reserve can be maintained in the fourth quarter. Trump is expected to announce a new chairman around November-December, and the results of the two director positions for Milan and Cook will also be revealed. Both Hasset and Milan have a more prominent MAGA color, and if they enter the Federal Reserve, their comments may attract market attention. Second, the expectation of interest rate cuts may continue. With weak employment data and Trump's intervention in the Federal Reserve, the market is expected to continue to anticipate a further interest rate cutting cycle in 2026. Third, the uncertainty of tariffs is difficult to resolve, and if IEEPA tariffs are blocked due to legality, it is expected that the White House may turn to expanding industry tariffs. Fourth, the long-term trend of "de-dollarization" will continue, with official institutions of various countries increasing their holdings, providing a fundamental support for gold demand. It is expected that under the macro background of this year, demand for gold from the private sector will also remain strong, gold ETFs will continue to attract funds, supporting the price of gold to continue to reach new highs. Risk warning: Unexpected monetary policy actions by the Federal Reserve, better-than-expected U.S. economic fundamentals, and unexpected economic policies by Trump.