Gold prices edge higher; Fed indepedence fears spur safe haven buying

Investing.com-- Gold prices rose Tuesday as safe haven demand was buoyed by increased concerns over Federal Reserve independence after President Donald Trump said he was firing Governor Lisa Cook. 

At 08:20 ET (12:20 GMT), spot gold rose 0.4% to $3,379.33 an ounce and gold futures for October rose 0.3% to $3,427.62/oz.

Spot prices briefly hit an over two-week high of $3,386.49/oz earlier in the session .

Fed independence concerns 

Trump said in a publicly released letter that he was calling for Cook’s immediate removal, claiming he had sufficient cause to do so over allegations of mortgage fraud against the Fed governor.

Cook rejected the allegations, stating that Trump had “no authority” to fire her and that she would stay on in her role.

The Cook firing is Trump’s latest attack on the Fed, and comes as the president seeks to gain more influence over the Fed’s rate-setting activities. Replacing Cook with his own nominee could give Trump greater influence in the Fed’s seven-member board, which currently includes two of his nominees – Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman. 

Waller and Bowman had both voted for a rate cut during the Fed’s July meeting, in line with Trump’s demands.

Trump had earlier raised the possibility of firing Fed Chair Jerome Powell, as the Fed chair largely dismissed calls to cut rates before Friday’s dovish speech.

China’s imports via Hong Kong soared in July

China’s net gold imports via Hong Kong rose 126.81% in July from June, Hong Kong Census and Statistics Department data showed on Tuesday.

As the world’s leading gold consumer, China’s purchasing activities can significantly influence global gold markets. However, the Hong Kong data may not provide a complete picture of Chinese purchases, as gold is also imported via Shanghai and Beijing.

Metal prices consolidate

Spot platinum fell 0.1% to $1,336.40/oz and spot silver slipped 0.5% to $38.520/oz. Both metals have outpaced gold in recent months, as years of underperformance saw traders seek buying opportunities in other precious metals.

Among industrial metals, benchmark copper futures on the London Metal Exchange rose 0.4% to $9,814.o5 a ton, while COMEX copper futures fell 0.5% to $4.5228 a pound.

Industrial metals had rallied sharply last week as the Fed’s signaling of potential rate cuts boosted risk appetite. This trend had offered limited gains to gold and precious metals. 

Ambar Warrick contributed to this article