Gold is trading higher at the start of the European session on Tuesday, August 26, influenced by the US President’s decision this morning to fire US Federal Reserve Governor Lisa Cook, which has raised market fears of exploitation by the US central bank. The yellow metal is trading up about 0.37% at $3,378 per ounce, after testing $3,386 at the start of the Asian session, its highest level in two weeks. Silver is trading at $38.67 per ounce, up 0.35%.
The US President announced the dismissal of US Federal Reserve Governor Lisa Cook after writing on his Truth Social account, “By this decision, you are removed from your position as Governor of the Federal Reserve, effective immediately.” He added, “I have found sufficient cause to remove you from your position.”
In response, Cook, who faces mortgage fraud charges, stated that Trump does not have the legal authority to fire her and that she will not resign. US President Donald Trump is attempting to pressure the US Federal Reserve and its leadership after repeatedly attacking its chairman, Jerome Powell, and indicating his intention to resign. He also expressed his intention to fire him. However, he later backed down, as Trump wants to cut interest rates quickly and rejects the idea that tariffs have an impact on inflation. These concerns have long been raised by the Fed, which has embraced them, and translated them into interest rate cuts since the beginning of the year.
Trump’s move to form a majority in the Federal Reserve and control its decisions to a reasonable extent may support a faster rate cut, especially after his appointment of Stephen Merrin to replace Adriana Kugler, who left her position early. However, this could represent an unprecedented risk to confidence in US assets, as it constitutes an interference in the independence of the central bank, leading to a decline in risk appetite in the markets and an increase in demand for safe havens.
Markets are awaiting durable goods orders figures this evening, Tuesday, amid expectations of a second consecutive monthly decline, in addition to US consumer confidence figures and the Richmond manufacturing index. Platinum, in turn, is trading at $1,335, down about 0.52%, while palladium is up about 0.61%, trading at $1,092.