Gold pares gains after Trump shoots down talk of ousting Powell
Gold prices jumped on Wednesday following news reports that U.S. President Donald Trump planned to fire Federal Reserve Chair Jerome Powell, but trimmed gains after Trump denied the claim.
Trump said he was not planning to fire Powell, but declined to rule anything out, citing an investigation into cost overruns on a $2.5-billion Fed renovation project.
Spot gold rose 1% to $3,354.01 per ounce, as of 0153 p.m. EDT (1753 GMT) after rising as much as 1.6% earlier.
U.S. gold futures settled 0.7% higher at $3,359.1.
"Headlines suggesting Trump was considering firing Powell drove gold prices higher... he later clarified it's highly unlikely. Gold markets were whipsawed by the back and forth," said Daniel Ghali, commodity strategist at TD Securities.
Israel launched powerful airstrikes in Damascus, damaging the Defence Ministry and striking near the presidential palace. The attack added to geopolitical worries and supported purchases of safe-haven gold.
On the trade front, the European Commission prepared to target $84.1 billion worth of U.S. goods for possible tariffs if trade talks with Washington fail after Trump threatened last week to impose 30% tariffs on imports from the EU.
"With Israeli strikes and the U.S. being more hawkish on trade tariffs, there is a little bit more uncertainty to the marketplace," which is helping gold, said Jim Wyckoff, a senior analyst at Kitco Metals.
"I expect gold to trade between $3,250 and $3,476 in the near term."
Adding support to gold was data that showed U.S. producer prices were unexpectedly unchanged in June from a 0.3% rise in May.
It followed Tuesday's data that showed overall consumer prices rose 0.3% in June, up from 0.1% in May, signalling the Federal Reserve may continue to exercise caution before cutting interest rates.
Gold thrives during uncertain times, and a low-interest rate environment boosts it further.
Spot silver added 0.5% to $37.89 per ounce.
Platinum gained nearly 3% to $1,412.55 and palladium rose 1.8% to $1,227.73.
Source: Reuters
