Gold slips from record high on profit taking by investors and as President Trump appears to retreat from his threat to fire the Fed Chair.
The yellow metal reached the new high above $3,500 an ounce amid fears of a global economic slowdown, U.S. President Donald Trump’s tariffs and threats to terminate Federal Reserve Chairman Jerome Powell, a move widely seen as threatening the central bank’s monetary policy independence. The precious metal came off the high to close lower for the day Tuesday after Trump backed off from the rhetoric about ousting Powell.
June gold futures slipped 0.2% Tuesday to settle at $3,419.40 an ounce on Comex. The front-month contract rallied 2.7% in the first two days of the week. Bullion has risen 8.5% so far this month after gaining 11% in March and adding 0.5% in February. It’s up 29% so far this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The June contract is currently down $121.70 (-3.56%) an ounce to $3297.70 and the DG spot price is $3275.90.
Gold has advanced in part in recent weeks on declines in the U.S. dollar, which make dollar-denominated gold more attractive to holders of other currencies. The dollar rebounded for a second day early Wednesday, pressuring gold, after Trump said he doesn’t plan to terminate Powell.
“No, I have no intention of firing him,” Trump told reporters Tuesday. “I would like to see him be a little more active in terms of his ideas to lower interest rates.”
The Fed has been widely expected to continue interest rate cuts this year, most likely in the summer, though the tariffs and associated market volatility have raised questions about by how much and when. Most investors tracked by the CME FedWatch Tool expect the Fed to begin interest rate cuts in June but keep them unchanged at the central bank policymakers’ next meeting in May. Lower interest rates are typically bullish for gold.
National Economic Council Director Kevin Hassett said Friday that the Trump administration has been looking for ways to remove Powell before the end of his term in May 2026. But there’s a question about whether the president has the legal authority to remove a Fed chair, since statute designates the Fed as an independent institution.
Fed officials including Powell have said that the Trump tariffs are likely to raise inflation and unemployment. High interest rates were imposed during the pandemic to curtail inflation.
The Fed left rates unchanged at 4.25% to 4.50% at policymakers’ last meeting in March but reduced rates three times in 2024. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year. Previously, the Fed had kept rates at 5.25% to 5.50% for a year.
The Fed’s Beige Book report on the country’s economic condition comes out Wednesday and may provide a better glimpse of the nation’s outlook. Initial jobless claims come out Thursday, and April consumer sentiment data comes out Friday.
Front-month silver futures gained 1.2% Tuesday to settle at $33.21 an ounce on Comex, and the July contract increased 1.3% in the first two days of the week. Silver is down 4.1% this month after advancing 9.9% in March and retreating 2.4% in February. It gained 21% in 2024. The July contract is currently down $0.138 (-0.42%) an ounce to $33.075 and the DG spot price is $32.86.
Spot palladium increased 0.4% Tuesday to $947.50 an ounce and is down 2% so far this week. Palladium is down 4.9% this month after rising 7.3% in March and retreating 10% in February. Palladium dropped 17% last year. The current DG spot price is up $11.70 an ounce to $958.00.
Spot platinum rose 0.1% Tuesday to $970.70 an ounce, though it’s down 0.6% so far this week. Platinum is down 3.5% this month after increasing 6.7% in March and sliding 4.7% in February. Platinum lost 8.4% in 2024. The DG spot price is currently up $15.50 an ounce to $983.70.
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