Gold Price Rises as US Dollar Drops on Fed Concerns
Gold prices moved slightly higher on Thursday, mainly because the US dollar fell to its lowest point in over three years. The drop in the dollar came after reports suggested that Donald Trump might replace Federal Reserve Chair Jerome Powell if he returns to office. This created fears that the central bank might lose its independence and come under political pressure, possibly leading to quicker interest rate cuts.
A weaker dollar usually supports gold because it makes the metal cheaper for people using other currencies. This increased demand helped push gold prices up. Spot gold traded near $3,334 per ounce, while gold futures reached about $3,347. Other metals also gained — silver stayed around $36.34, platinum rose 1.6%, and palladium went up by 4.2%.
The situation in the Middle East also affected markets. A ceasefire between Israel and Iran seems to be holding, which made investors feel more confident and reduced demand for safe-haven assets like gold.
Traders are now looking ahead to upcoming US economic data. The Gross Domestic Product (GDP) report is due later today, and the Personal Consumption Expenditures (PCE) inflation report will be released on Friday. These reports could give important hints about whether the Fed will cut interest rates soon.
Impact:
Gold prices could stay strong if fears about Fed independence continue and the US dollar remains weak. Economic data this week might also influence price direction.