Gold prices rose to a two-week high on Tuesday, as the dollar slipped after U.S. President Donald Trump said he was removing Federal Reserve Governor Lisa Cook from her position on the Fed’s board of directors.
Spot gold was up 0.5% at $3,384.34 per ounce, as of 0055 GMT, its highest level since August 11. U.S. gold futures for December delivery gained 0.4% to $3,432.40.
The U.S. dollar index fell 0.3% against its rivals, making gold less attractive to overseas buyers.
Trump on Monday took the unprecedented action of firing Lisa Cook, the first African-American woman to serve as a Federal Reserve governor, over claims of mortgage borrowing impropriety.
Fed Chair Jerome Powell on Friday signaled a possible interest rate cut at the U.S. central bank’s meeting next month, saying that risks to the job market were rising but also noting inflation remained a threat and that a decision wasn’t set in stone.
Markets are now pricing in an 83% chance of a quarter-point rate cut at the Fed’s September 17 policy meeting, according to CME FedWatch Tool.
Gold tends to appreciate in a low-interest-rate environment, which reduces the opportunity cost of holding non-yielding bullion.
Focus now shifts to the Personal Consumption Expenditures Price Index – the Fed’s preferred inflation gauge – due on Friday for more cues on U.S. rate cut path.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.18% to 958.49 tonnes on Monday from 956.77 tonnes on Friday.
Elsewhere, spot silver rose 0.4% to $38.72 per ounce, platinum gained 0.7% to $1,352 and palladium climbed 1% to $1,096.75.
