Stability of Gold Prices Amid Uncertainty Over the Future of the U.S. Federal Reserve

SadaNews - Gold stabilized after a volatile session on Wednesday, as traders evaluated expectations regarding Jerome Powell's future as Chairman of the Federal Reserve, following renewed speculation about the possibility of his dismissal by U.S. President Donald Trump.

Gold prices fell below $3,350 an ounce after rising by 0.7% in the previous session.

Trump stated that he "does not plan to do anything" to dismiss Powell, after a White House official indicated that Trump is likely to seek to remove the Federal Reserve Chairman.

Gold prices jumped amid this speculation, while U.S. stocks, the dollar, and Treasury yields fell, before markets calmed down following Trump's clarification.

Concerns Over Powell’s Dismissal Persist

Nevertheless, concerns about political interference remain. Dismissing Powell before the end of his term in 2026 would raise questions about the independence of the Federal Reserve, thus enhancing gold's appeal as a safe haven.

It is worth noting that the precious metal has risen by about 30% since the beginning of the year, supported by trade and geopolitical tensions, along with strong inflows into exchange-traded funds and purchases by central banks.

Gold stabilized at $3,343.61 an ounce by 8:40 AM in Singapore. The Bloomberg Dollar Spot Index rose by 0.1%. Meanwhile, platinum and palladium remained stable after rising by more than 3% in the previous session.