Spot gold prices touched a two-week high in early Tuesday trading, reflecting a weakening US dollar and stronger demand for safe-haven assets. The precious metal has been on the front foot since Jerome Powell hinted last week that rate cuts could be on the horizon, with gains accelerating after the US President announced on Monday the dismissal of Federal Reserve governor Lisa Cook — a move that reignited concerns over the central bank’s independence and fears of political interference in monetary policy. Such a development is negative for the credibility of the world’s largest economy, weighing on the US dollar and leading to losses against other major currencies, which in turn supported gold due to the inverted price correlation between the two assets. With a September rate cut increasingly likely, questions over the Fed’s long-term independence, and an uncertain economic outlook marked by tariff tensions and renewed inflationary pressures, further upside for gold prices remains possible.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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