Gold rallies above $3,400 as Fed independence fight boosts safe-haven demand
Gold price rises to a five-week high of $3,413 as traders shrug off solid economic data from the United States (US), which justifies the current stance by the Federal Reserve (Fed) to hold rates unchanged. However, safe-haven demand, driven by threats to the Fed’s independence, underpins Bullion prices.
The XAU/USD trades with gains of over 0.6%, boosted by a weak Dollar and falling US Treasury yields.
Data from the US revealed that the economy is growing at a solid pace, exceeding forecasts and the preliminary reading for the second quarter of 2025. Additionally, the number of Americans filing for unemployment benefits decreased, a sign of strength in the labor market.
Although the economy is faring well, concerns about the Fed’s independence keep Gold underpinned.
Bloomberg reveals that Fed Governor Lisa Cook “sued President Donald Trump over his attempt to fire her for alleged mortgage fraud, kicking off a historic fight over independence of the US central bank.”
Ahead this week, traders will eye the release of the Fed’s favorite inflation gauge, the core Personal Consumption Expenditures (PCE) Price Index. The core PCE for July is expected to rise from 2.8% to 2.9% YoY.
Source: FXstreet
