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Gold gains as weaker dollar, Trump-Fed uncertainty drive safe-haven demand

Gold gains as weaker dollar, Trump-Fed uncertainty drive safe-haven demand

Web Desk
Jun 26, 2025

WASHINGTON: Gold prices rose slightly on Thursday, supported by a weaker dollar and political uncertainty after reports suggested that US President Donald Trump had considered replacing Federal Reserve Chair Jerome Powell as early as September or October.

The idea of a leadership change at the US central bank raised concerns about its future independence, prompting investors to seek safety in gold.

Spot gold rose 0.2 per cent to $3,339.20 per ounce by 0242 GMT, while US gold futures were up 0.3 per cent to $3,353.10.

The US dollar index fell to its lowest level since March 2022, making gold cheaper for buyers using other currencies.

Powell, speaking to a US Senate panel on Wednesday, warned that while tariffs imposed by Trump might lead to a temporary rise in prices, the risk of lasting inflation remains, requiring the Fed to be cautious about cutting interest rates further.

KCM Trade Chief Market Analyst Tim Waterer said Trump is likely to push for a more dovish Fed chair, which could increase the chances of deeper rate cuts and put further pressure on the dollar.

Gold generally performs well during periods of uncertainty and in low-interest-rate environments.

Trump, speaking on Wednesday, called Powell “terrible” and mentioned he was considering several candidates to take over the Fed leadership. The Wall Street Journal reported that Trump may announce a successor as early as September or October.

Investors are now awaiting fresh US economic data, including the GDP figures expected later today and Personal Consumption Expenditures (PCE) data due on Friday.

“Gold is holding steady for now as the market waits for key US data like GDP and core PCE,” said Waterer.

Meanwhile, the ceasefire between Israel and Iran appeared to be holding. At a NATO summit, Trump welcomed the end of the 12-day conflict and said he hoped to secure a commitment from Iran to end its nuclear ambitions in upcoming talks.

Among other precious metals, spot silver rose 0.2 per cent to $36.36 per ounce, platinum gained 2.3 per cent to $1,385.38, and palladium jumped 5.5 per cent to $1,115.58.