Gold just hit a fresh all-time high of $5,311 per ounce on Wednesday morning, and it's not exactly hard to see why. The yellow metal is up 22.5% this year, riding a wave of dollar weakness right into the Federal Reserve's closely watched policy meeting.

Trump's Currency Philosophy

The latest catalyst? The U.S. dollar sliding to its lowest point since February 2022. When reporters asked President Donald Trump about this development during a stop in Iowa, he wasn't exactly losing sleep over it.

"I think the value of the dollar — look at the business we're doing. The dollar's doing great," Trump told reporters, according to Reuters. He added that he'd want the currency to "seek its own level."

Translation: price discovery is back on the menu. Meanwhile, today's Fed meeting is widely expected to keep rates unchanged. As of Wednesday morning, the CME FedWatch tool shows a 97.2% chance the central bank stays put. But investors seem increasingly focused on what happens after Chair Jerome Powell's tenure ends, especially with mounting political pressure to ease policy.

"Given the tension between the Fed's mandates and the White House, markets are becoming more defensive ahead of Powell's remarks," Ilya Spivak, head of global macro at Tastylive, said, according to Reuters.

The Dollar's Technical Break

A weaker dollar has been gold's best friend lately. The Dollar Index (DXY) just pierced through a multi-year uptrend line on the monthly timeframe, which is the kind of technical development that gets chartists excited. It's intensifying bearish momentum in the currency.

For context, the DXY bottomed out in June 2011 following the Great Recession, then rallied more than 50% over the next decade before peaking in September 2022. That peak came during aggressive Fed tightening and a broad equity selloff.

But before we declare this breakdown definitive, there's a caveat. With three trading days left before the monthly candle closes, Dow Theory purists will tell you that only closing prices validate a structural trend break. So there's still room for a late rebound.

Wall Street Raises Its Sights

Banks are scrambling to update their gold forecasts. Deutsche Bank raised its 2026 price target to $6,000 per ounce in a Tuesday note, though they're not ruling out even higher prices.

"In alternative scenarios, a $6,900 per ounce price would in fact be more in line with the past two years' outperformance," the bank said.

Société Générale also sees gold reaching $6,000, while Morgan Stanley has flagged a bull-case target of $5,700. Goldman Sachs most recently raised its forecast to $5,400, highlighting meaningful upside risks amid monetary, political, and currency dynamics that continue to align in gold's favor.

Price Watch: SPDR Gold Shares (GLD) is up 20.13% year-to-date.