Gold prices soar as Trump's Fed threats shake markets
Gold prices continue to break records—on Tuesday, they surpassed $3,486 per ounce. This surge is the market's response to Trump's threats to dismiss Fed Chairman Jerome Powell.
Gold increased on Tuesday to $3,486.29 per ounce, rising by 1.8% The metal is reaching historical highs due to investors' concerns that U.S. President Donald Trump may dismiss Fed Chairman Jerome Powell.
The U.S. President stated last week that if desired, Federal Reserve Chairman Jerome Powell could very quickly leave his position. He criticized the head of the central bank, asserting that it's his duty to lower interest rates for Americans.
Donald Trump has expressed his belief that he has the right to fire Powell, which is seen as a threat to the independence of the American central bank.
The U.S. President's remarks caused a capital flight from the American stock and bond markets and led to a significant weakening of the dollar.
Gold's rapid ascent this year tells me that markets have less confidence in the US than ever, says Lee Liang Le from Kallanish Index Services.
"The 'Trump Trade' narrative has evolved into a 'sell America' narrative," she adds. On Monday, gold prices rose by 2.9%.
Trump wants to fire the Fed Chairman
On Monday, Trump referred to the Federal Reserve Chairman as a "big loser" on Truth Social, cautioning that the U.S. economy could slow down if interest rates are not immediately lowered. The Trump administration is examining whether it is legally feasible to remove the central bank chairman before his term concludes.
Last week, the U.S. President reiterated that if he wishes, Fed Chairman Powell will "very quickly" leave his position.
CNN noted on Friday that many experts believe Trump is not authorized to dismiss the Fed Chairman, but the President has clearly indicated a willingness to challenge existing protocols, potentially risking significant consequences.
