A market strategist stated that although the US dollar index has successfully held the key long-term support level above 103 points, this will not pose a significant threat to the rise in gold prices, as US interest rates will not provide much support for the US dollar.

George Milling Stanley, Chief Gold Strategist at State Street Global Advisors, stated that he does not anticipate the Federal Reserve's current neutral stance to pose a significant threat to gold prices for the remainder of this year.

He made the above comments after the Federal Reserve kept interest rates unchanged last week. In the latest economic forecast, the Federal Reserve has lowered its growth forecast and raised its inflation outlook. The Federal Reserve predicts that the US economy will grow by 1.7% this year, and inflation will rise to 2.7%, higher than the previously predicted 2.1% and 2.5%, respectively.

As the Federal Reserve's interest rate forecast (i.e. the dot plot) remains unchanged, implying that it will cut interest rates twice this year, there is some buying momentum for the US dollar. Following weak economic data and a sharp decline in the stock market, the market has been anticipating three interest rate cuts this year.

However, Milling Stanley stated that the chaos and uncertainty surrounding President Trump's potential tariffs will outweigh the impact of the Federal Reserve's monetary policy on the US dollar.

He said, "Guess what usually thrives in times of chaos and uncertainty? It's often gold. Powell's statement about the uncertainty of tariffs is absolutely correct. I think he's issuing a warning that the government should take action to improve efficiency on issues such as which tariffs will take effect, what level tariffs will reach, and who will be affected

Milling Stanley added that as gold prices test the support level of around $3000 per ounce, any clarity on US import tariffs could put some selling pressure on gold. Media reports have begun to circulate that Trump's tariffs may be narrower than previously expected, thereby reducing the threat of a global trade war.

Although the gold price has fallen from its historical high of over $3050 per ounce last week, Milling Stanley said that this round of upward trend is far from over. He added that the consolidation period may be beneficial to the market.

If the gold price fluctuates around $3000 for a considerable period of time this year, I wouldn't be surprised, I think it's entirely possible. If we can survive for a while this year, I will have more confidence in the sustainability of gold prices above $3000

Although gold prices may remain stagnant for a period of time, Milling Stanley predicts that they will continue to rise before the end of the year.

He said, "We may take longer than some people expected, but I don't think people should worry about it. I don't see any significant resistance at all. I think a neutral Federal Reserve may be the right position at the moment, and I don't expect it to put any pressure on gold prices

He stated that his team is currently sticking to the initial 2025 price forecast, which has a 50% chance of a price between $2600 and $2900 per ounce and a 30% chance of a price between $2900 and $3100 per ounce. However, he added that given the upward trend so far this year, it is highly likely that he will adjust his price forecast.

One of the biggest reasons why Milling Stanley expects gold prices to maintain good support at these high levels is that investors are only now beginning to invest in gold ETFs to diversify their investments and escape disappointing stock markets.

He said, "We expect ETFs to be a major driving force for investment demand for the remainder of this year

According to data from the World Gold Council (WGC), approximately 31 tons of global gold ETF funds worth $3 billion flowed in last week. This is the 8th consecutive week of capital inflows, with North American funds contributing the majority of the growth.

SPDR Gold Shares (NYSE: GLD) is the world's largest gold ETF and has seen significant growth in recent weeks. State Street Bank is the marketing agent for GLD and Micro ETF GLDM.

Since the beginning of the year, GLD has grown by $3.75 billion, and GLDM has grown by $1.25 billion. I am glad to see that ETFs are finally catching up, as they have not truly fully participated in the Western world's investment recovery of the past few years.