Gold Prices Stabilize After Gains from Rising Concerns About the Federal Reserve's Independence

SadaNews - The price of gold stabilized after two days of gains, amid increasing market concerns about the erosion of the independence of the U.S. Federal Reserve, following President Donald Trump's attempts to oust Governor Lisa Cook, in a move that could change the composition of the monetary board and exacerbate inflation risks.

Cook stated that she would resist Trump's moves to remove her over accusations of mortgage document fraud. Her attorney confirmed that the impeachment attempt "lacks any legal or factual basis."

If Trump succeeds in removing Cook, he would be able to appoint a majority of four members to the seven-member board, enhancing his ability to push for interest rate cuts, a demand he has repeated several times. Markets fear that this would undermine the independence of U.S. monetary policy, undermine investor confidence, and possibly accelerate a new inflation wave.

Gold Seeks a New Catalyst

After touching record levels exceeding $3,500 per ounce in April, gold has been moving within a narrow range in recent weeks, as investors await new catalysts to push prices in any direction. The yellow metal had previously benefited from trade and geopolitical tensions, central bank purchases, and inflows into exchange-traded funds, amid efforts to diversify away from the dollar.

As of 9:04 AM Singapore time, gold was down 0.2% to $3,391.71 per ounce. The Bloomberg Spot Dollar Index also decreased by 0.1%. Silver and palladium remained stable, while platinum ticked down slightly.