Image Credit: WSJ

Gold Prices Slip as Dollar Strengthens, Trump Calms Fed Fears

Gold prices edged lower on Thursday as the U.S. dollar strengthened following President Donald Trump’s comments that dismissed speculation about firing Federal Reserve Chair Jerome Powell. The calming rhetoric helped reduce investor anxiety around central bank independence, weighing on demand for the safe-haven metal.

Spot gold (XAU/USD) dipped to around $3,340/oz, retreating from recent highs amid shifting risk sentiment. Traders saw renewed appetite for the U.S. dollar, supported by a stable outlook on monetary policy and reduced political uncertainty surrounding the Federal Reserve’s leadership. Investing.com

Dollar Rises as Fed Independence Reassured

President Trump, who had previously criticized Powell over interest rate policies, clarified during a press briefing that he had “no intention” of replacing the Fed chair. Markets took the comment as a sign of institutional continuity, which boosted confidence in the U.S. central bank’s autonomy. Reuters

The U.S. Dollar Index (DXY) climbed to near-monthly highs following the remarks, making gold relatively more expensive for holders of other currencies and further pressuring bullion prices.

In addition, a flat reading in June’s Producer Price Index (PPI) suggested that inflation at the production level may be stabilizing. That gave markets more confidence in the Fed’s ability to manage rates effectively without external political influence, reinforcing the dollar’s upward move. CNBC

Gold Faces Mixed Signals from Global Factors

While Trump's assurance helped calm U.S. rate concerns, global geopolitical developments provided some support for gold. Tensions in the Middle East and ongoing uncertainty around global trade continue to offer a mild floor under prices. Econotimes

However, analysts note that gold is likely to remain range-bound in the near term, with key support seen at $3,312–3,245 and resistance between $3,380–3,440. The RSI hovered near neutral levels, reflecting market indecision.

Looking ahead, traders will monitor next week’s Fed minutes and inflation data for fresh cues. Unless geopolitical risks escalate, gold may continue to track dollar movements and investor confidence in Fed leadership.

 

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