Gold prices eased Wednesday, retreating from a two-week high as investors digested fresh political tensions between former President Donald Trump and the Federal Reserve. At 08:25 ET (12:25 GMT), spot gold slid 0.4% to $3,380.47 an ounce, while October futures edged 0.1% lower to $3,429.30/oz, reversing part of this week’s safe-haven driven gains.
The rally earlier in the week was fueled by Trump’s sudden attempt to remove Fed Governor Lisa Cook, a move that unsettled investors and triggered debate over the central bank’s independence. Cook has vowed to challenge the action in court, calling the move baseless.
Markets viewed Trump’s maneuver as a broader attempt to tilt Fed policy, potentially reshaping the seven-member board with his nominees. That prospect has reignited fears of political interference in monetary decisions, long seen as the cornerstone of Fed credibility.
Fed Independence in Question
The standoff comes at a sensitive time for the U.S. economy. Trump has openly criticized Fed leaders for not cutting interest rates aggressively, blaming higher borrowing costs for slowing growth. Earlier this year, he even threatened to fire Chair Jerome Powell.
Replacing Cook could hand Trump greater influence over monetary policy, strengthening his push for easier rates despite Fed warnings about inflationary pressures from tariffs and fiscal stimulus.
Investors traditionally turn to gold when confidence in U.S. institutions weakens. However, as the dollar rebounded midweek, momentum in the yellow metal stalled.
Key points for investors:
- Spot gold: down 0.4% to $3,380.47/oz
- Gold futures: down 0.1% to $3,429.30/oz
- Dollar index: recovering losses from earlier in the week
- Treasury yields: steady after sharp swings
Broader Metals Under Pressure
The dollar’s recovery and stabilized bond yields weighed on broader metals, limiting gains sparked earlier by safe-haven demand and Chinese stimulus optimism.
- Platinum: down 0.6% to $1,340.60/oz
- Silver: down 0.5% to $38.495/oz
- Copper (LME): down 0.8% to $9,766.10/ton
- Copper (COMEX): down 1.4% to $4.4703/pound
Copper had logged strong gains last week on expectations of lower U.S. rates and Beijing’s renewed stimulus pledges. But the rebound in the dollar trimmed momentum.
The political fight over Fed independence continues to ripple across asset classes, reminding investors how sensitive metals remain to U.S. monetary policy and currency dynamics.