Gold rose to a two-week high in Asian trading on Tuesday. The reason was both the fall of the dollar and the escalation of the confrontation between Donald Trump and the US Federal Reserve after the president's high-profile announcement of Lisa Cook's dismissal. This was reported by Investing, writes UNN.
Details
Gold once again confirmed its status as a "safe haven" for investors: on Tuesday night, its quotes on world markets rose to their highest levels in the last two weeks. In Asian trading, the spot price rose by 0.3% to $3,375.29 per ounce, and October futures added 0.2%, reaching $3,423.95. At its peak, the price rose to $3,386.49 per ounce.
The main factor in the growth was the political scandal in the United States. Donald Trump, in an open letter, stated that he intended to dismiss Lisa Cook from her position as head of the Fed, accusing her of financial fraud. Cook sharply rejected the accusations, emphasizing that the president does not have the authority to remove her from office. The conflict raised doubts about the preservation of the independence of the country's main financial regulator.
Markets reacted instantly: investors began to actively invest in gold and other precious metals. The weakening dollar further fueled this trend. Platinum rose 0.1% to $1,346.40 per ounce, silver – 0.7% to $38.85.
Industrial metals were not left out either. On the London Metal Exchange, copper rose 0.7% to $9,848.85 per ton, and on COMEX – 0.4% to $4.55 per pound. Demand for metals was stimulated by expectations of a future Fed rate cut, which Jerome Powell cautiously spoke about last week.
However, Trump's consistent attacks on the Federal Reserve are increasing investor anxiety. If the Fed's independence is questioned, it could seriously damage confidence in the American economy. For now, gold remains the main beneficiary, once again becoming the main tool for capital protection in conditions of political and financial instability.
Recall
Despite the previous increase in the value of monetary gold as a method of saving money, its popularity as a jewelry metal has significantly decreased. As noted in a comment for UNN by financial expert Olena Sosedka, this was most reflected in key markets - India and China.
"Gold prices in the global market have become so high that it has reduced the popularity of buying gold jewelry. This was most reflected in such key markets as India and China, but a global decline in demand is felt all over the world. Due to the rising price, former fans of gold jewelry are increasingly preferring other precious metals. Instead, gold is more often considered as a way to preserve capital in conditions of economic instability and high inflation. And not as an item of everyday use," said Olena Sosedka.
In addition, analysts at Goldman Sachs, one of the largest and most influential investment banks in the world, predict that if the dollar continues to fall, the price of gold will reach $3,700 per troy ounce by the end of 2025.