Global Gold Market: Gold prices edged lower due to a strong dollar, but Fed news limited the decline
Gold prices fell slightly due to a strong dollar, but concerns about the independence of the Federal Reserve rose as Trump threatened to fire Fed Governor Cook, limiting the decline in gold prices. Spot gold was reported at $3,386.19 per ounce, down 0.2%. The market expects an 87% chance that the Federal Reserve will cut interest rates by 25 basis points at its policy meeting on September 17. The holdings of the world's largest gold exchange-traded fund, SPDR Gold Trust, increased slightly
Reuters, August 27 - Gold prices edged lower on Wednesday, pressured by a rise in the dollar; however, concerns over the independence of the Federal Reserve resurfaced after President Trump threatened to fire Fed Governor Lisa Cook, providing support for gold prices.
At 0118 GMT, spot gold (XAU=) was quoted at $3,386.19 per ounce, down 0.2%, after hitting a high since August 11 on Tuesday.
U.S. December gold (GCcv1) rose 0.1% to $3,435.70.
The dollar index (.DXY) increased by 0.1%, making gold less attractive to investors holding other currencies.
Trump stated that he had reason to dismiss Cook due to alleged misconduct in obtaining a mortgage. This move could test the boundaries of presidential power over the Federal Reserve.
In response, Cook stated that Trump does not have the authority to fire her from the Fed, and she will not resign.
Trump has been urging the Fed to cut interest rates and has repeatedly criticized Fed Chairman Powell for being too slow in taking action.
According to the CME FedWatch Tool, the market currently sees an 87% chance of a 25 basis point rate cut by the Fed at its policy meeting on September 17.
Market focus is now shifting to the Fed's preferred inflation indicator—the Personal Consumption Expenditures (PCE) price index, which will be released on Friday, for more clues on the U.S. rate cut path.
The world's largest gold exchange-traded fund, SPDR Gold Trust (GLD), reported that its holdings increased from 958.49 tons on Monday to 959.92 tons on Tuesday, a rise of 0.15%.
In other precious metals, spot silver (XAG=) was flat at $38.59 per ounce; platinum rose 0.3% to $1,353.11; and palladium (XPD=) climbed 0.8% to $1,102.50
