Bengaluru — Gold prices edged lower on Wednesday, pressured by an uptick in the dollar, though renewed concern over the US central bank’s independence after President Donald Trump’s threat to fire Federal Reserve governor Lisa Cook lent support to bullion.
Spot gold was down 0.2% at $3,384.49/oz by 2.23am GMT, after hitting its highest level since August 11 on Tuesday. US gold futures for December delivery were flat at $3,434.20.
The dollar index rose about 0.2% against its rivals, making gold less attractive for other currency holders.
“Short-term speculators are taking a bit of profit right now. However, gold is still being supported especially as we start to see a much more clear dovish stance from the Federal Reserve,” Oanda senior market analyst Kelvin Wong said.
“We could see in the near term there is still potential upward pressure to test $3,400, above it will be the $3,435 level.”
Trump said he was removing Cook over alleged improprieties in obtaining mortgage loans, a step that could test the boundaries of presidential power over the US Fed.
In response, Cook said Trump had no authority to fire her from the central bank, and she would not resign.
Trump has been pushing the US central bank to cut rates and has repeatedly criticised Fed chair Jerome Powell for acting too slowly.
Focus now shifts to the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, due on Friday for more cues on interest rate path after dovish remarks from Powell at Jackson Hole symposium last week.
Markets are now pricing in an 87% chance of a quarter-point rate cut at the Fed’s September 17 policy meeting, according to CME FedWatch Tool.
Nonyielding gold typically performs well in a low-interest-rate environment.
Elsewhere, spot silver eased 0.1% to $38.56/oz, platinum gained 0.2% to $1,351.50 and palladium climbed 0.6% to $1,101.02.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.