Gold hits two-week high as US dollar slips after Trump fires Fed’s Cook

[BENGALURU] Gold prices rose to a two-week high on Tuesday (Aug 26), as the US dollar slipped after US President Donald Trump said that he was removing Federal Reserve governor Lisa Cook from her position on the Fed’s board of directors.

Spot gold was up 0.5 per cent at US$3,384.34 per ounce, as at 8.55 am, its highest level since Aug 11. US gold futures for December delivery gained 0.4 per cent to US$3,432.40.

The US dollar index fell 0.3 per cent against its rivals, making gold less attractive to overseas buyers.

Trump on Monday took the unprecedented action of firing Lisa Cook, the first African-American woman to serve as a Federal Reserve governor, over claims of mortgage borrowing impropriety.

Fed chair Jerome Powell on Friday signalled a possible interest rate cut at the US central bank’s meeting next month, saying that risks to the job market were rising but also noting inflation remained a threat and that a decision was not set in stone.

Markets are now pricing in an 83 per cent chance of a quarter-point rate cut at the Fed’s Sep 17 policy meeting, according to the CME FedWatch Tool.

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Gold tends to appreciate in a low-interest-rate environment, which reduces the opportunity cost of holding non-yielding bullion.

Focus now shifts to the Personal Consumption Expenditures Price Index – the Fed’s preferred inflation gauge – due on Friday for more cues on the US rate cut path.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.18 per cent to 958.49 tonnes on Monday from 956.77 tonnes on Friday.

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Gold slips from two-week peak as US dollar ticks up

Elsewhere, spot silver rose 0.4 per cent to US$38.72 per ounce, platinum gained 0.7 per cent to US$1,352 and palladium climbed 1 per cent to US$1,096.75. REUTERS