Gold Slips from Two-Week High as Dollar Strengthens, but Fed Drama Offers Support
Gold prices dropped slightly on Wednesday but stayed supported as worries around the U.S. Federal Reserve kept safe-haven demand alive.
Spot gold slipped about 0.2%, trading close to $3,384 per ounce, after touching a two-week high earlier this week. At the same time, the U.S. dollar index moved up nearly 0.2%, making gold costlier for international buyers. Normally, a stronger dollar pushes gold lower—but this time, politics played a big role.
Tensions rose after President Trump moved against a Fed governor, raising big questions about the independence of the Federal Reserve. Many investors fear that politics could now heavily influence U.S. monetary policy. Because of this, gold continued to attract buyers as a safe-haven asset.
Analysts believe gold is still holding strong and could test resistance near $3,400–$3,435 if market sentiment remains positive. On the other hand, stronger U.S. data could pull prices back down.
Now, traders are waiting for the U.S. Personal Consumption Expenditures (PCE) Price Index for July. This key inflation data will be a big clue about where Fed policy is heading and whether interest rate cuts might be on the table.
Impact:
* If inflation cools further, gold could jump back above $3,400 as investors expect rate cuts and worry about Fed independence.
* If inflation rises, the dollar may get stronger, pulling gold lower in the short term.
