Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold gained 0.7% to close above $3,352 as Treasury yields and the dollar fell on flights to safety after reports that President Trump was preparing to fire Fed Chair Jerome Powell. Silver added less than 0.1% to finish at $38.75 an ounce.

Bloomberg reported that the President floated the idea of firing Powell to several Republican lawmakers, testing the waters and awaiting a reaction from the market. Trump and his allies have put the Fed under extreme pressure recently to cut interest rates.

He did not have to wait long. Treasury yields and the dollar immediately tumbled while gold jumped more than 1% on worries that the Fed would lose its independence, thereby undermining global faith in US assets.

Trump quickly denied the reports while simultaneously suggesting Powell may have committed fraud, an offense that would justify his termination, by allowing cost overruns on an ongoing Federal Reserve renovation project.

Still, the markets were mollified by the denial, with yields and the dollar paring losses while gold pared its gains.

Adding to demand for bullion, the PPI on goods rose in June as tariffs lift wholesale costs. The overall PPI was unchanged, however, because of falling prices on services. The data comes one day after the CPI release showed consumer prices rising by the most in five months.

In addition, Israel launched intensive airstrikes into Damascus, deepening geopolitical concerns and boosting safe-haven demand.

Platinum and palladium rose 3.2% and 2.6%, respectively.

At the New York spot close: gold gained $22.709 to $3,352.50; silver added 2 cents, to $37.85; platinum picked up $43.55 to $1,420.25; and palladium advanced $31.65 to $1,238.85 an ounce.