Weakening dollar and Trump's criticism of Powell support gold prices

Gold prices saw a slight increase on Thursday amid a weakening dollar. The main influence came from comments made by US President Donald Trump regarding the imminent announcement of a successor to Federal Reserve Chair Jerome Powell. These remarks raised concerns about the future independence of the American central bank and boosted demand for safe-haven assets, including gold.

As Powell stated on Wednesday before the US Senate, the risk of persistent inflation due to Trump's tariffs is significant enough for the Fed to exercise caution regarding further rate cuts.

According to KCM Trade analyst Tim Waterer, the president clearly wants to see a "dovish" central bank chair next time. As a result, the increased likelihood of an aggressive rate-cutting cycle is putting pressure on the US dollar. Gold, on the other hand, traditionally benefits from uncertainty and low interest rates.

As reported by The Wall Street Journal, Trump mentioned the potential announcement of Powell's successor as early as September or October of this year.

Markets are currently awaiting the release of US GDP and personal consumption expenditures data, which will set the direction for gold prices.