WASHINGTON (dpa-AFX) - Gold touched a two-week high on Tuesday as the dollar weakened on Fed independence worries and ahead of a looming key U.S. inflation report.
Spot gold edged up by 0.3 percent to $3,374.83 per ounce in European trade, while U.S. gold futures were up 0.1 percent at $3,421.72.
The dollar slipped after U.S. President Donald Trump dismissed Federal Reserve Governor Lisa Cook over alleged mortgage borrowing impropriety, the latest in a series of attacks on the central bank's independence.
Trump said there was enough evidence that Cook had made false statements on mortgage applications.
Trade tensions also kept investors on edge, with Trump threatening 200 percent tariffs on China if Beijing does not export rare-earth magnets to the U.S.
At the Oval Office on Monday, Trump spoke of Washington's strength in its standoff with Beijing and warned that if he played the 'incredible cards' at his disposal, it would 'destroy China.'
'We are going to have a great relationship with China... They have some cards. We have incredible cards, but I don't want to play those cards. If I play those cards, that will destroy China. I am not going to play those cards,' he said.
In economic releases, U.S. reports on durable goods orders and consumer confidence may garner some attention in the New York session.
The Case-Shiller Home Price Index and the Richmond Fed Manufacturing Index are also due.
Richmond Federal Reserve President Thomas Barkin will speak before the Montgomery County Chamber of Commerce.
The Fed's preferred readings on consumer price inflation will be released on Friday and analysts say that inflation likely stayed too hot for comfort in July.
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