Gold rose after US President Donald Trump moved to oust Federal Reserve Governor Lisa Cook with immediate effect, raising concerns about central bank independence and the prospect of strengthening haven demand.
Bullion climbed as much as 0.6% in early Asian trading, erasing an earlier decline, after Trump posted a letter with the announcement on his Truth Social account late on Monday. The dollar weakened against every major peer and short-dated Treasury yields slipped, adding support for gold, which is priced in the currency.
The move is Trump’s latest attempt to pressure the Fed leadership, whom he has called on repeatedly but unsuccessfully to lower interest rates. The central bank has held monetary policy steady so far in 2025 amid concerns that Trump’s tariffs will fuel inflation, though on Friday Chair Jerome Powell signaled a potential adjustment in September. Lower rates tend to benefit non-yielding gold.
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Forcing out Cook, who is facing allegations of mortgage fraud, would allow Trump to secure a four-person majority on the seven-member board. Earlier this month, he chose Council of Economic Advisers Chairman Stephen Miran to serve in the place of Adriana Kugler, who vacated her position early.
“Any pick would be seen as closely toeing the line to Trump’s demands for looser policy,” said Charu Chanana, a strategist at Saxo Capital Markets Pte. “For gold — that means support from increasing rate cut expectations, but also from investors hedging for longer-term inflation and institutional risks down the line.”
The precious metal has climbed by more than a quarter this year, with the bulk of those gains occurring in the first four months as heightened geopolitical and trade tensions spurred haven demand. Since hitting a peak above $3,500 an ounce in April, the metal has lacked fresh catalysts for advances — though several market watchers, including Citigroup Inc. and the wealth management unit of UBS Group AG, anticipate more upside later this year.
Traders were also watching US personal consumption data due on Friday. The figure — excluding food and energy — is expected to accelerate at the fastest annual pace in five years, which could limit the Fed’s ability to lower rates.
Spot gold was up 0.3% to $3,377.24 an ounce at 9:58 a.m. in Singapore. The Bloomberg Dollar Spot Index was down 0.2%, after gaining as much as 0.5%. Silver rose, while palladium and platinum were steady.
Copper rose 0.6% to $9,853.00 a ton on the London Metal Exchange as of 9:58 a.m. in Singapore, while other base metals edged lower. Iron ore eased 0.4% to $102.85, while yuan-priced futures on the Dalian exchange fell 0.4%. Shanghai steel futures also declined.
