Gold valuation surges to unprecedented levels in response to Trump's criticisms towards the Federal Reserve
Gold Smashes Records with Trump-Powell Drama
In an unexpected twist, the price of gold has skyrocketed, reaching an unprecedented $3,500.05 per ounce, as the tension between President Donald Trump and Federal Reserve Chair Jerome Powell heats up.
On a tumultuous Tuesday, gold prices surged by a staggering 2.2%, following a jaw-dropping 2.9% increase in the previous trading session. This meteoric rise marks a more than 30% increase since the start of the year, sending shockwaves through the financial world. Simultaneously, gold holdings in exchange-traded funds are at their highest level since a record-breaking September 2023.
The latest surge in the precious metal's price is primarily attributed to Trump's intensifying criticism toward Powell. In a threatening tone, Trump has publicly called for the Fed to slash interest rates, causing alarm bells to ring over the potential erosion of the Fed's independence. Consequently, the dollar plummeted to its lowest level since 2023.
Adding to the uncertainty, a report by the Federal Reserve Bank of Philadelphia on Thursday revealed a steep decline in business confidence within the manufacturing sector, further fueling investor anxieties.
"The cocktail of political strife and weakening economic indicators has sent investors scrambling for a safe haven, and gold seems to be their go-to option," Naeem Aslam, chief market analyst at London-based Zaye Capital Markets, commented on the escalating situation.
The abrupt rise in gold prices this year has stirred a flurry of analysts to polish their price predictions for the precious metal and boost demand for mining company stocks. This unexpected trend could reshape the financial landscape as we know it.
While this wasn't the case in previous years, recent data shows that gold prices have a clear correlation with the tussle between Trump and Powell. The market seems to interpret Trump's criticism as a potential threat to the Fed's independence, fueling a flight to safety and driving up gold prices.
[1] Trump's April 2025 statement: "No intention" to dismiss Powell, causing gold prices to plummet.[2] Gold reached a historic high of $3,500.05 per ounce following Trump's April 25, 2025, criticism of Powell.[3] Trump's April 25, 2025, public call for immediate interest rate cuts heightened instability fears, pushing investors towards gold.[4] Markets perceived Trump's criticisms as inflationary, weakening the dollar and boosting the appeal of gold.
[1] In a surprising turn, gold prices plummeted following Trump's April 2025 statement expressing no intention to dismiss Powell.
[2] Gold reached an unprecedented high of $3,500.05 per ounce, as Trump criticized Powell on April 25, 2025.
[3] Trump's April 25, 2025, call for immediate interest rate cuts heightened financial instability, prompting investors to jump into gold.
[4] The market interpreted Trump's criticisms as potentially inflationary, weakening the dollar and making gold a financially precious asset.
