Tensions between Trump and US Fed could lead to sharp rise in gold prices — Swissquote Bank

Over the past few months, President Donald Trump has actively criticized the neutral monetary policy stance of US Federal Reserve (Fed) Chairman Jerome Powell. Even though Trump denied rumors of Powell's possible resignation as Fed chair, calling the likelihood of this happening “extremely low”, such an environment has led to increased unease in the markets.

According to Swissquote Bank analyst Ipek Ozkardeskaya, undermining the independence of the US central bank will lead to extremely negative consequences, such as a fall in the dollar and Treasuries. The Fed itself would lose the ability to support financial markets by buying up debt and expanding its balance sheet.

In these circumstances, Ozkardeskaya advised investors to look at safe haven assets, especially gold, noting the likelihood of its sharp rise in case of major changes in the US this fall. Michael Brown, senior market analyst at Pepperstone, also considers the current situation favorable for the precious metal. Naeem Aslam, Chief Investment Officer at Zaye Capital Markets, and Jim Wyckoff, Senior Market Analyst at Kitco, share a similar view.