Gold price surges past $3,340 as markets reacted to a sharp decline in the US dollar on Thursday. This rise came amid fresh dovish signals from the Federal Reserve. President Trump indicated he might announce a new Fed Chairman as early as September or October. This move could weaken Chairman Powell’s influence before his term ends in June. The President seems likely to pick a dovish candidate, supporting calls for lower interest rates. Lower rates reduce the opportunity cost of holding non-interest-bearing assets like gold.
Meanwhile, Powell mentioned that softer tariffs compared to April’s announcements would likely ease inflationary pressure. This outlook supports a Federal Open Market Committee (FOMC) stance favoring looser financial conditions. Consequently, the Fed may pursue easier monetary policy to support the economy. These developments have also raised hopes among investors that the central bank will take a more flexible approach, especially amid ongoing global economic uncertainties. The market remains attentive to forthcoming Fed statements and data releases.
Other central banks followed suit with rate cuts. The European Central Bank (ECB), Bank of England (BoE), People’s Bank of China (PBoC), Reserve Bank of India (RBI), and Swiss National Bank (SNB) all eased their monetary policies this week. These actions helped boost gold demand as investors sought safer assets.
On the geopolitical front, tensions between Iran and Israel showed signs of easing. This de-escalation prevented a stronger rally in gold prices. Usually, heightened conflicts push bullion prices higher due to safe-haven buying. However, calmer conditions limited further gains on Thursday.
In summary, the gold price surges past $3,340 due to a weaker US dollar, dovish central bank signals, and coordinated rate cuts worldwide. Investors are closely watching how the new Fed Chairman appointment and ongoing geopolitical events will shape market dynamics in the coming months.
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