Gold rises as weaker dollar, Trump's Powell criticism fuel uncertainty

Gold prices rise

Gold prices edged higher on Thursday, lifted by a weaker dollar and growing uncertainty after reports suggested US President Donald Trump had considered replacing Federal Reserve Chair Jerome Powell as early as September or October.

The reports raised concerns over the future independence of the US central bank, boosting demand for safe-haven bullion.

Spot gold was up 0.2% at $3,339.20 per ounce, as of 0242 GMT. US gold futures rose 0.3% to $3,353.10.

The dollar fell to its lowest level since March 2022, making greenback-priced gold less expensive for overseas buyers.

Powell told a US Senate panel on Wednesday that while Trump's tariffs may cause a one-time price hike, the risk of persistent inflation is significant enough for the central bank to be cautious about further rate cuts.

"Trump clearly wants a dovish Fed Chairman next time around, so the increased likelihood of an aggressive rate-cutting cycle is pinning down the USD," KCM Trade Chief Market Analyst Tim Waterer said.

Bullion tends to do well during periods of uncertainty and in a low-interest-rate environment.

On Wednesday, Trump called Powell "terrible" and said he is considering three or four candidates for the top Fed post.

Meanwhile, The Wall Street Journal reported that Trump has even toyed with the idea of announcing Powell's potential successor by September or October.

Markets are awaiting US GDP print due later in the day, while also keeping a watch for data on Personal Consumption Expenditures (PCE) on Friday.

"Gold is just basically treading water for the moment until we get a read on the next batch of U.S. macro data including GDP and core PCE," Waterer said.

A ceasefire between Israel and Iran appeared to be holding on Wednesday as Trump, at a NATO summit, praised the swift end to the 12-day conflict and said he would seek a commitment from Iran to end its nuclear ambitions at talks next week.

Spot silver edged up 0.2% to $36.36 per ounce, platinum firmed 2.3% to $1,385.38, while palladium surged 5.5% to $1,115.58.