Gold prices pulled back from two-week highs during Asian trade on Wednesday as investors weighed concerns over the United States Federal Reserve’s independence and new tariff threats from Washington, which kept the U.S. dollar in focus.
By 4 pm AEST (6 am GMT), spot gold was down $16.08, or 0.5%, at $3,377.69 per ounce, easing from levels just shy of $3,400 reached earlier in the session.
The market remains fixated on tensions between U.S. President Donald Trump and the Federal Reserve. On Tuesday, Trump said he planned to fire Fed Governor Lisa Cook over what he described as “false statements” on mortgage applications.
Cook rejected the claim, insisting the president lacked authority to remove her.
The dispute raises concerns over the Fed’s autonomy, which has clouded sentiment and is expected to cap the dollar’s near-term gains.
Traders are also positioning for a possible interest rate cut in September, further dampening the Greenback’s outlook.
Tariff concerns are adding to gold’s support. Washington’s latest 50% levies on Indian exports took effect Wednesday, while Trump has also revived threats of new measures against China.
Rising trade tensions have heightened fears for global economic growth, weighing on U.S. assets and underpinning gold demand.
Investors now turn their attention to Friday’s release of the U.S. core personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, which could provide fresh guidance on the central bank’s rate path and gold’s next major move.
