Market News

Gold (GC=F)

Gold prices fell on Thursday morning, as the dollar strengthened and US president Donald Trump tempered fears that he planned to fire Federal Reserve chair Jerome Powell.

Speaking to reporters in the Oval Office on Wednesday, Trump said he is "not planning" to fire Powell, though he reiterated his view that rates should be lower and the Fed chair is doing a "terrible job."

"I don't rule out anything, but I think it's highly unlikely, unless he has to leave for fraud," he added when asked about a firing.

Trump's comments came just about an hour after a slew of reports suggested the president was inching closer to firing Powell.

The dollar sold-off amid the reports on Wednesday but later recovered most of its losses 

On Thursday morning, the US dollar index (DX-Y.NYB), which measures the greenback against a basket of six currencies, rose 0.3% to 98.71.

A stronger dollar typically weighs on gold prices, given that the precious metal tends to be traded in the US currency, so this makes it more expensive for overseas buyers.

Gold is also considered to act as a safe haven asset in times of geopolitical and economic uncertainty, so an easing of market fears over Powell's position weakened the appeal of the precious metal.

Gold futures (GC=F) were down 0.8% to $3,332,10 per ounce, at the time of writing, while spot gold fell 0.6% to $3,326.81 per ounce.

Looking further ahead, Rick Kanda, managing director at The Gold Bullion Company, said that as the year progresses "gold could continue to see significant increases, especially if economic instability continues, as this will encourage central banks to keep at it with their aggressive gold-buying strategies. This behaviour from the banks is ultimately contributing to the upward pressure on gold prices."