Gold prices soar amid Trump's threats to sack Fed Chair
Gold prices continue to set new records. This reflects the market's reaction to Donald Trump's threats, as he considers removing Federal Reserve Chairman Jerome Powell from his position.
Gold rose on Tuesday to $3,486.29 per ounce, an increase of 1.8% The metal has reached historical highs in response to investors' concerns that US President Donald Trump may dismiss Fed Chairman Jerome Powell.
The US President stated last week that if he desires, Federal Reserve Chairman Jerome Powell will very swiftly leave his position. He has once again criticised the head of the central bank, asserting that he is obligated to lower the interest rates for the benefit of Americans.
Donald Trump has claimed he has the authority to dismiss Powell, a suggestion viewed as a threat to the independence of the American central bank.
The US President's remarks have led to a capital flight from the American stock and bond markets and caused a notable weakening of the dollar's exchange rate.
Gold’s rapid ascent this year tells me that markets have less confidence in the US than ever, observes Lee Liang Le from Kallanish Index Services.
- The 'Trump Trade' narrative has evolved into a 'sell America' narrative - she adds. On Monday, gold prices went up by 2.9%.
Trump wants to sack the Fed Chairman
On Monday, Trump described the Federal Reserve Chairman as a "major loser" on Truth Social and cautioned that the US economy could slow down if interest rates are not reduced immediately. The Trump administration is investigating whether it is legally feasible to remove the central bank chairman before his term concludes.
Last week, the US President suggested that if he wishes, Fed Chairman Powell will "very quickly" vacate his position.
As reported by CNN on Friday, many experts say Trump is not authorised to dismiss the Fed Chairman, but the President has clearly implied that he might consider contravening existing protocols, even if this potentially involves significant repercussions.
