US pushing gold prices to unrealistic levels

The perception that the United States is pushing gold prices to unrealistic levels is getting credence among some analysts, but the reality is more complex. Gold prices are influenced by multiple forces, many of which are tied to US policies and actions. Let us do some due diligence:

1. US Dollar and Monetary Policy

Gold is priced is quoted in US dollars around the world. When the Federal Reserve cuts interest rates, maintains low real yields, or expands liquidity through quantitative easing, investors seek gold as a hedge against dollar weakness. Conversely, when the Fed signals persistent inflation risks but avoids aggressive tightening, gold becomes attractive as a safe asset.

2. Inflation and Debt Pressures

The US is running record deficits and debt levels (over US$35 trillion). To finance this, the Fed and Treasury rely on loose monetary policies, which fuel fears of currency debasement. Gold thrives in such environments.

3. Geopolitical Strategy

Some analysts argue the US indirectly supports higher gold prices by fostering global instability - Middle East wars, tensions with China and Russia. In uncertain times, central banks and investors shift to gold. Ironically, Washington doesn’t mind if gold rises, because it pushes countries like China, Russia, and emerging economies to park reserves in gold instead of US Treasuries, reducing immediate pressure on US bond markets.

4. Central Bank Buying Trend

In recent years, especially after US sanctions on Russia’s reserves, central banks worldwide including China, Turkey, India, and even Poland have accelerated gold purchases to reduce dependence on the US dollar. The US fuels this trend by using the dollar as a geopolitical weapon, it motivates others to seek neutral reserve assets like gold, which drives its prices higher.

5. Speculation and Market Psychology

Large US-based funds and banks also influence gold prices via futures and ETFs. Speculative flows exaggerate moves, at times pushing prices well above fundamentals.

While it is being propagated that the US is not literally setting gold prices, in reality its monetary policy, sanctions strategy, and geopolitical behavior create conditions that push demand for gold. To some, this makes prices look unrealistic, but in fact they reflect rising mistrust in the US dollar system.

Following is the graph showing the hike in gold prices over the last two years (2023–2025). You can see a steady rise in 2023–2024, followed by a sharp surge in 2025 — nearly doubling from under US$2,000/ oz to over US$3,700/ oz.