Gold surged to a one-month high this week, and politics in Washington are part of the story. President Donald Trump’s bold decision to remove Federal Reserve Governor Lisa Cook has shaken up the financial world, with investors weighing how a more assertive White House role could influence the Fed’s path forward.
Markets were already bracing for Friday’s release of the PCE Price Index, the Fed’s key inflation gauge, with traders betting heavily on a September rate cut. Gold, which thrives in lower-rate environments, gained further momentum as the dollar slipped—pushing spot gold to $3,407 per ounce and futures above $3,466.
For some analysts, Trump’s willingness to hold the Fed accountable is seen as long overdue. Others caution that the clash over independence could add uncertainty to monetary policy. Either way, the shake-up is drawing global attention. As Ricardo Evangelista of ActivTrades explained, “Any challenge to the Fed’s credibility supports demand for safe-haven assets like gold.”
Investors are responding by flocking to precious metals. Silver climbed 1.2% to $39.08, platinum ticked up 0.2%, and palladium advanced 1.1%. With inflation data pending and Washington drama unfolding, traders are hedging against turbulence the old-fashioned way—by turning to gold.
The takeaway? Trump’s move underscores how closely politics and markets remain tied. While the president’s actions energize debate in Washington, they also remind investors that gold shines brightest in times of change.
