Quick overview

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Gold prices fell Thursday amid some improvement in risk appetite after U.S. President Donald Trump downplayed fears that he would prematurely fire Fed Chair Jerome Powell. Trump on Wednesday said it was “highly unlikely” he would fire Fed Chair Powell; however, it remained a possibility if there was evidence of fraud in the Fed’s ongoing renovation project.

Concerns over Powell’s firing were fueled by Trump ramping up his attacks on the Fed Chair, and several members of Trump’s Republican allies were also seen calling for Powell’s immediate removal. Trump claimed that Powell has been too late in cutting U.S. interest rates, demanding that he do so immediately to prevent economic damage.

Powell and several Fed policymakers, on the other hand, have signaled that interest rates will remain unchanged until the inflationary impact of Trump’s tariffs becomes clear.

Trump’s downplaying of his crusade against Powell helped marginally improve market sentiment, which in turn sapped some near-term demand for gold and boosted U.S. equities.

Gold prices gained around 28% so far this year, with the global trade war, geopolitical risks, and central bank buying being the key drivers of the precious metal’s rally.