By Sarah Qureshi
(Reuters) – Gold prices rose on Tuesday, lifted by safe-haven demand as investor confidence in the U.S. central bank wavered following President Donald Trump’s dismissal of a Fed governor.
Spot gold gained 0.5% to $3,384.24 an ounce at 1629 GMT, climbing to its highest level since August 11.
U.S. gold futures for December delivery were up 0.5% at $3,433.50.
“Overnight you had the news that Trump fired one of the Fed governors accused of mortgage fraud. It gave a little life to gold because the Fed’s kind of been the driver in gold right now,” said RJO Futures market strategist Bob Haberkorn.
U.S. President Donald Trump said he was firing Federal Reserve Governor Lisa Cook over alleged improprieties in obtaining mortgage loans, an unprecedented step that could test the boundaries of presidential power over the independent monetary policy body should it be challenged in court.
Last week, Federal Reserve Chair Jerome Powell signalled a possible interest rate cut at the U.S. central bank’s meeting next month, saying that risks to the job market were rising.
Markets are currently pricing in over 86% probability of a quarter-point rate cut in September, according to the CME FedWatch tool.
“If Powell alludes to a dovish tone on rates at the next meeting and moving forward to another cut for this year, gold should continue higher,” Haberkorn added.
Data showed that the U.S. July durable goods orders data showed a decline of 2.8%, compared with a 4% expected decrease and a decline of 9.4% in June. Investors now await the U.S. GDP data on Thursday and the Personal Consumption Expenditures (PCE) on Friday.
Non-yielding gold tends to gain appeal in a low-interest-rate environment and its safe-haven appeal increases during economic uncertainty.
Spot silver was flat at $38.54 an ounce.
Platinum added 0.5% to $1,349.20. Palladium rose 0.8% to $1,094.91 after reaching its lowest level since July 9 earlier in the session.
(Reporting by Sarah Qureshi in Bengaluru; editing by Sophie Walker and Tomasz Janowski)
