Gold (GOLD) is up over 2% today, driven by market uncertainty and a weakening U.S. dollar, which took a sharp hit as investors began seriously pricing in the risk of a leadership change at the Federal Reserve after Donald Trump signalled firing Fed chair Powell as possible. Dollar index futures (USDIDX) are down more than 1.2%, while EUR/USD is gaining 0.85%, setting new local highs around 1.15.
- On Friday, Donald Trump stated that he could fire Fed Chair Jerome Powell if he really wanted to, while National Economic Council Director Kevin Hassett confirmed that Trump intends to do so. A weaker dollar has long been a goal of Trump’s administration, citing export competitiveness as a key advantage.
- Trump has also been openly pressuring Powell for some time, arguing that the U.S. is experiencing “virtually no inflation” and that interest rates should have been lowered long ago. Markets are reacting to this rhetoric as another sign of Trump’s unpredictability, which is seen as undermining the institutional and legal order in the United States, while also signaling a potential pivot toward a more dovish Federal Reserve policy. Powell’s current term ends in May 2026.
Gold is emerging as a major beneficiary of this shift—not only as an "anti-dollar" asset but also as a traditional safe haven in times of geopolitical tension or political upheaval that threatens fiat currencies. Today, the metal has reached a new all-time high near $3,400 per ounce. The mix of softening US macro readings, persisted trade war tensions (still no deal announced), geopolitical uncertainty and possible Fed 'dovish put' without the Powell support gold.
Source: xStation5
Source: xStation5
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