Gold prices rose in European trade on Thursday on track for the second straight profit away from recent two-week lows as the US dollar swoons against major rivals.
It comes amid renewed concerns about the independence of the Federal Reserve after renewed attacks by US President Donald Trump against Fed Chair Jerome Powell.
Prices
Gold prices rose 0.35% today to $3343 an ounce, with a session-low at $3329.
On Wednesday, gold rose 0.25%, the first profit in four days away from a two-week trough at $3295.
US Dollar
The dollar index fell 0.45% on Thursday, sharpening losses for the fourth straight session and plumbing three-year lows at 97.27 against a basket of major rivals.
A weaker dollar makes the greenback-denominated gold futures cheaper to holders of other currencies.
Trump attacks Powell
Trump once again criticized Powell for refusing to cut interest rates, and asserting Powell will leave his position soon.
Powell told the Senate of the need to be cautious with monetary policies, as Trump’s tariffs represent a risk to inflation.
Powell warned that while Trump’s tariffs could cause a one-time hike in prices, the risk of sustained inflation is big enough to force the Fed into more caution about rate cuts.
The Wall Street Journal reports that Trump is considering choosing and announcing his successor by September or October as a way to undermine him.
US Rates
Fed official Michelle Bowman said on Monday that the time for an interest rate cut is approaching amid potential risks to the labor market.
The odds of a Fed 0.25% rate cut at the July meeting rose from 15% to 23% according to the Fedwatch tool.
The odds of a Fed September rate cut rose from 68% to 78%.
SPDR
Gold holdings at the SPDR Gold Trust fell by 2.29 tons yesterday to a total of 953.39 tons.
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