Gold Prices Climb as Trump Moves to Remove Fed Governor Cook

Gold prices saw an uptick following US President Donald Trump’s announcement about his plans to dismiss Federal Reserve Governor Lisa Cook, raising fears over the central bank’s independence and potentially driving demand for safe-haven assets.

The value of bullion climbed by as much as 0.6% before settling back to around $3,376 an ounce. This adjustment took place after Trump released a letter concerning this announcement on his Truth Social account late Monday. The dollar weakened against all major currencies but later regained some strength after Cook asserted that the president does not have the authority to remove her, reiterating her refusal to resign. Generally, a declining dollar supports gold prices, given that it is priced in that currency.

This latest move reflects Trump’s ongoing attempts to influence the Fed’s leadership, as he has persistently urged for interest rate cuts. Throughout 2025, the central bank has stuck to a consistent monetary policy amidst concerns that Trump’s tariffs could heighten inflation. However, on Friday, Chair Jerome Powell hinted at a possible policy shift in September, where lower rates could favor the non-yielding gold.

Dismissing Cook, who is currently facing allegations of mortgage fraud, would allow Trump to solidify a four-member majority on the seven-person board. Earlier this month, he appointed Stephen Miran, Chairman of the Council of Economic Advisers, to succeed Adriana Kugler after her unexpected resignation.

“Any new appointment will likely be perceived as closely aligning with Trump’s calls for a more lenient policy,” stated Charu Chanana, a strategist at Saxo Capital Markets Pte. “For gold, this means support is likely coming from growing expectations of rate cuts, as well as investors hedging against long-term inflation and institutional risks.”

The precious metal has increased by more than 25% this year, with the majority of gains seen in the first four months, fueled by heightened demand for safe havens amid escalating geopolitical and trade tensions. After hitting above $3,500 an ounce in April, gold has been searching for new catalysts for growth; however, several market analysts, including those from Citigroup and UBS Group AG’s wealth management division, anticipate further upward movement in the coming months.

Traders are also monitoring upcoming US personal consumption data scheduled to be released on Friday. The figure, excluding food and energy, is forecasted to increase at its fastest annual rate in five years, which could limit the Fed’s ability to lower rates.

At 2:33 p.m. Singapore time, spot gold was up 0.3% to $3,375.48 an ounce. The Bloomberg Dollar Spot Index fell by 0.1%, after previously rising by 0.5% on Monday. While silver prices climbed, both palladium and platinum experienced declines.

Copper was trading at $9,807 per ton on the London Metal Exchange, up 0.1% as of 2:55 p.m. in Singapore, while other base metals dipped slightly. Iron ore dropped 1% to $102.30, and yuan-priced futures on the Dalian exchange fell by 0.7%. Steel futures in Shanghai also declined.

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