This week, the Federal Reserve held interest rates unchanged for a fifth consecutive meeting. While the markets anticipated the decision, they reacted sharply to the nuance (If it can be called that) in Jerome Powell’s post-meeting remarks. Two Federal Open Market Committee members, Michelle Bowman and Christopher Waller, broke from consensus and called for rate cuts. Their dissent was notable, not for the policy implications, but for what it suggested: a widening rift within the Fed at a time of mounting political scrutiny and economic dislocation.
But perhaps the more pressing question is whether this monetary theatre still matters. The immediate market reaction of marginal downward pressure on gold was short-lived. More importantly, it misread gold’s role entirely.
In our latest video, we examine a deeper, more structural dynamic: gold is no longer tethered to interest-rate cycles in any meaningful way. The inverse correlation that economists once treated as axiomatic has broken down. Across decades of data, the statistical relationship between rates and gold prices has proved tenuous at best. What’s replacing it is more profound: a growing recognition that gold’s value lies not in yield, but in its sovereignty.
Today, central banks are among the largest buyers of physical gold. This is not because they expect it to outperform in the short term, but because they recognise what it protects against: political risk, fiscal dysfunction, and monetary overreach.With U.S. debt exceeding $36 trillion and real growth slowing to just 1.2% in H1 2025, the temptation to monetise deficits through financial repression is rising. That reality does not require forward guidance, it requires protection.
Physical gold remains immune to political pressure, central bank error, or legislative drift. It carries no counterparty risk. It is not diluted by stimulus, nor does it require faith in a technocratic class whose independence may soon be more notional than real. As reports emerge of Donald Trump exploring the dismissal of Powell, the fragility of the Fed’s autonomy is no longer a speculative concern but it is a live political question.
Meanwhile, the broader financial system continues to operate on a kind of conditional trust: that institutions will remain competent, that debt will be serviced, and that inflation will be “anchored.” Gold requires no such assumptions. It is not an act of faith, this is a tangible reserve of value that exists independently of the mechanisms that increasingly look unstable.
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