Global gold prices are entering a critical phase as investors closely assess the policy direction of incoming Federal Reserve Chair Kevin Warsh, whose stance on interest rates is expected to play a decisive role in shaping both the US Dollar and precious metals markets for the remainder of 2026.
Gold has continued to post gains throughout 2026, supported by lingering macroeconomic uncertainty, elevated geopolitical risks, and expectations surrounding future US monetary policy. However, market sentiment is now increasingly focused on how Kevin Warsh’s leadership at the Federal Reserve could redefine the trajectory of interest rates and inflation expectations in the months ahead.
Spot gold prices reached an all-time high of US$5,418.54 per ounce on January 28, 2026, extending the strong bullish momentum that previously drove prices up 64.70% throughout 2025, when gold closed the year at US$4,322.61 per ounce.
Despite that historic rally, gold prices have recently faced downward pressure, although the metal continues to trade at relatively elevated levels. As of Friday (May 15, 2026) at 11:30 WIB, gold prices were recorded near US$4,610 per ounce, still reflecting a year-to-date (YtD) gain of 6.59%.
Financial markets are now preparing for Kevin Warsh to officially assume leadership of the Federal Reserve this week, replacing Jerome Powell. Investors are expected to closely monitor Warsh’s policy communication, particularly regarding interest rates, as any shift in monetary policy direction could significantly influence the strength of the US Dollar and broader commodity markets, including gold.
US President Donald Trump had previously urged Jerome Powell on multiple occasions to maintain lower interest rates in order to support economic growth. During an interview with CNBC International in April, Trump stated that he would be disappointed if Warsh failed to move quickly toward cutting rates after taking office.
However, Kevin Warsh emphasized his commitment to maintaining the Federal Reserve’s institutional independence when questioned by senators regarding political pressure and the autonomy of the central bank.
“President Trump has never asked me to determine, commit to, set, or decide interest rate policy in any of our discussions, and I would never agree to do so,” Warsh stated, reinforcing expectations that monetary policy decisions under his leadership would remain data-dependent.
The Federal Reserve’s next interest rate decision is scheduled for June 17, a meeting that could become a major catalyst for both currency and commodity markets.
According to the CME Group FedWatch Tool, market participants currently assign a 98% probability that the Federal Reserve will maintain its benchmark interest rate within the 3.5%–3.75% range during the upcoming meeting.
Douglas Porter, Chief Economist at Bank of Montreal, noted that market-implied expectations for interest rate cuts this year remain extremely limited. He also highlighted that traders have increasingly started pricing in the possibility of future rate hikes in 2027 rather than aggressive monetary easing.
“Even for next year, markets are beginning to factor in the potential for rate increases in 2027,” Porter said.
The current policy outlook suggests that the Federal Reserve may remain cautious about loosening monetary conditions too quickly, especially if inflation remains sticky and economic activity continues to show resilience. Under such circumstances, higher-for-longer interest rates could strengthen the US Dollar while limiting further upside momentum in gold prices.
Nevertheless, gold continues to retain strong long-term support from global central bank demand, geopolitical uncertainty, and investor hedging activity against inflation and financial market volatility. As a result, Kevin Warsh’s first policy signals as Federal Reserve Chair are likely to become one of the most closely watched macroeconomic events for global markets in the second half of 2026.
