Gold hits two-week high after Trump attempts to fire Fed Governor Cook
Gold prices climbed to an over two-week peak on Tuesday, lifted by safe-haven demand, as investor confidence in the U.S. central bank wavered following President Donald Trump’s dismissal of a Federal Reserve governor.
Spot gold gained 0.5% to $3,382.19 an ounce at 01:50 p.m. ET (1750 GMT), its highest level since August 11.
U.S. gold futures for December delivery settled 0.5% higher at $3,433.
"Overnight you had the news that Trump fired one of the Fed governors accused of mortgage fraud. It gave a little life to gold because the Fed's kind of been the driver in gold right now," said RJO Futures market strategist Bob Haberkorn.
U.S. President Donald Trump said he was firing Fed Governor Lisa Cook over alleged improprieties in obtaining mortgage loans, an unprecedented step that could test the boundaries of presidential power over the independent monetary policy body should it be challenged in court.
Last week, Federal Reserve Chair Jerome Powell signalled a possible interest rate cut at the U.S. central bank's meeting next month, saying that risks to the job market were rising.
Markets are currently pricing in over 87% probability of a quarter-point rate cut in September, according to the CME FedWatch tool, opens new tab.
"If Powell alludes to a dovish tone on rates at the next meeting and moving forward to another cut for this year, gold should continue higher," Haberkorn added.
Data showed that the U.S. July durable goods orders data showed a decline of 2.8%, compared with a 4% expected decrease and a decline of 9.4% in June. Investors now await the U.S. GDP data on Thursday and the Personal Consumption Expenditures (PCE) on Friday.
Non-yielding gold tends to gain appeal in a low-interest-rate environment and its safe-haven appeal increases during economic uncertainty.
Spot silver inched up 0.1% at $38.52 an ounce.
Platinum fell 0.1% to $1,340.88. Palladium rose 1.5% to $1,102.65 after reaching its lowest level since July 9 earlier in the session.
Source: Reuters
