Gold prices hit new highs amid Trump-Fed tensions
Gold prices continue to break records. On Tuesday, they surpassed $3,486 per ounce in response to President Trump's threats to dismiss Fed Chairman Jerome Powell.
Gold increased on Tuesday to $3,486.29 per ounce, up by 1.8% The metal is reaching historical highs due to investors' concerns that U.S. President Donald Trump may fire Fed Chairman Jerome Powell.
The U.S. President stated last week that if he wishes, Federal Reserve Chairman Jerome Powell will leave his position very quickly. He once again criticized the head of the central bank, asserting that it's essential to lower interest rates for the benefit of Americans.
Donald Trump commented that he has the authority to fire Powell, which was interpreted as a threat to the independence of the American central bank.
The U.S. President's remarks triggered a capital flight from the American stock and bond market and a notable weakening of the dollar's exchange rate.
Gold’s rapid ascent this year tells me that markets have less confidence in the US than ever, says Lee Liang Le from Kallanish Index Services.
- The ‘Trump Trade’ narrative has evolved into a ‘sell America’ narrative - she adds. On Monday, gold prices rose by 2.9%.
Trump wants to fire the Fed Chairman
On Monday, Trump called the Federal Reserve Chairman a "major loser" on Truth Social and warned that the U.S. economy could slow down if interest rates are not immediately lowered. The Trump administration is exploring whether it is legally possible to dismiss the central bank chairman before his term concludes.
Last week, the U.S. President asserted that if he wishes, Fed Chairman Powell will "real fast" leave his position.
As noted by CNN on Friday, according to many experts, Trump is not authorized to fire the Fed Chairman, but the President has clearly signaled that he may want to break with existing rules, even if this potentially involves significant consequences.
