By Sarah Qureshi and Anushree Mukherjee
(Reuters) – Gold prices hit a five-week high on Thursday, supported by a softer dollar and safe-haven flows, due to ongoing concerns over the Federal Reserve’s independence.
Spot gold rose 0.6% to $3,416.14 per ounce at 0147 p.m. ET (1747 GMT), hitting its highest level since July 23.
U.S. gold futures for December delivery settled at $3,466.10.
The dollar index slipped 0.5%, making greenback-priced gold more affordable for overseas buyers. [US/]
“Gold has been climbing quietly but steadily higher for over a week due in part to rising concerns about Fed independence. Trump’s pressure … is spurring unease that the FOMC could cut rates more quickly and keep them lower for longer, which is good for gold,” said Tai Wong, an independent metals trader.
Markets are currently pricing in a more than 87% chance of a quarter-point rate cut at the Fed’s September meeting, as per CME FedWatch tool.
Investors now await Friday’s Personal Consumption Expenditures (PCE) data, a key inflation gauge for the U.S. central bank.
Non-yielding gold thrives in a low-interest-rate environment and during times of economic uncertainty.
Federal Reserve Governor Lisa Cook filed a lawsuit claiming Trump has no power to remove her from office, setting up a legal battle that could reset long-established norms for the U.S. central bank’s independence.
“I think near-term it’s bullish for gold. I would say somewhere around $3,700 by year end,” said Daniel Pavilonis, senior market strategist at RJO Futures.
Elsewhere, spot silver was up 1.2% at $39.09 per ounce, its highest point since July 25.
“Silver has had a great quarter but momentum slumped in August and it’s waiting for a spark. Some think silver will take off like an antelope above $40. That might coincide with gold making new highs,” said Wong.
Platinum gained nearly 1% to $1,359.70, while palladium climbed 0.8% to $1,100.53.
(Reporting by Sarah Qureshi and Anushree Mukherjee in Bengaluru; Editing by Leroy Leo, Vijay Kishore and Maju Samuel)
