US PCE data due on Friday
Silver hits over one-month peak
Fed Governor Cook sues Trump after he attempted to fire her
(Adds comment, updates prices for U.S. mid-session trading)
By Sarah Qureshi and Anushree Mukherjee
Aug 28 (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 0.4% to $3,409.99 per ounce at 1204 p.m. ET (16:04 GMT), its highest level since July 23.
U.S. gold futures for December delivery were up 0.5% at $3,466.10.
The dollar index slipped 0.3%, making greenback-priced gold more affordable for overseas buyers.
“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 0.9% at $38.95 per ounce, after touching its highest point since July 25 earlier today.
“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 slipped 0.1% to $1,346.38, while palladium climbed nearly 1% to $1,100.98. (Reporting by Sarah Qureshi and Anushree Mukherjee in Bengaluru; Editing by Leroy Leo and Vijay Kishore)
