Gold pares losses as US Dollar eases; Fed turmoil keeps sentiment cautious
Gold (XAU/USD) pares intraday losses on Wednesday after trading defensively for most of the day, pressured by a stronger US Dollar (USD). At the time of writing, the metal trades near $3,393 during the American session, recovering from a dip to $3,373 in Asian hours as the Greenback eases and bullion finds support.
Gold is trading near a fresh two-week high as buyers step back in after earlier selling pressure tied to a stronger US Dollar. The recovery reflects easing Dollar momentum and resilient demand, with sentiment underpinned by political uncertainty surrounding the Federal Reserve’s (Fed) independence and the shifting monetary policy outlook. President Trump’s unprecedented bid to remove Governor Lisa Cook has raised concerns about the erosion of central bank autonomy, amplifying safe-haven demand. At the same time, Fed Chair Jerome Powell’s dovish message at Jackson Hole — signaling that conditions “may warrant” interest rate cuts — reinforces expectations of an easier monetary stance ahead.
Amid growing pressure on the central bank, Trump’s push to remove Fed Governor Lisa Cook appears less about disputed mortgage-fraud allegations and more about reshaping monetary policy to suit his political objectives. On Tuesday, he declared that he expects to soon command a “majority” on the Fed’s Board of Governors, a shift that could tilt the institution toward more aggressive rate cuts. Cook, however, has refused to resign and is preparing to challenge the move in court, setting up a legal battle that could test the limits of presidential power over the Fed.
Source: FXstreet
