Gold keeps recovering as Trump skewers Powell
Gold prices rose in European trade on Thursday on track for the second straight profit away from recent two-week lows as the US dollar swoons against major rivals.
It comes amid renewed concerns about the independence of the Federal Reserve after renewed attacks by US President Donald Trump against Fed Chair Jerome Powell.
Prices
Gold prices rose 0.35% today to $3343 an ounce, with a session-low at $3329.
On Wednesday, gold rose 0.25%, the first profit in four days away from a two-week trough at $3295.
US Dollar
The dollar index fell 0.45% on Thursday, sharpening losses for the fourth straight session and plumbing three-year lows at 97.27 against a basket of major rivals.
A weaker dollar makes the greenback-denominated gold futures cheaper to holders of other currencies.
Trump attacks Powell
Trump once again criticized Powell for refusing to cut interest rates, and asserting Powell will leave his position soon.
Powell told the Senate of the need to be cautious with monetary policies, as Trump’s tariffs represent a risk to inflation.
Powell warned that while Trump’s tariffs could cause a one-time hike in prices, the risk of sustained inflation is big enough to force the Fed into more caution about rate cuts.
The Wall Street Journal reports that Trump is considering choosing and announcing his successor by September or October as a way to undermine him.
US Rates
Fed official Michelle Bowman said on Monday that the time for an interest rate cut is approaching amid potential risks to the labor market.
The odds of a Fed 0.25% rate cut at the July meeting rose from 15% to 23% according to the Fedwatch tool.
The odds of a Fed September rate cut rose from 68% to 78%.
SPDR
Gold holdings at the SPDR Gold Trust fell by 2.29 tons yesterday to a total of 953.39 tons.
Euro extends gains to four-year peak on strong demand
The euro rose in European trade on Thursday against a basket of major rivals, expanding gains for the sixth straight session against the US dollar and hitting a four-year high, and surpassing the $1.17 barrier for the first time since 2021 on strong demand.
It comes amid renewed concerns about the independence of the Federal Reserve after renewed attacks by US President Donald Trump against Fed Chair Jerome Powell.
The odds of an ECB interest rate cut in July also dropped as traders await more clues on the future path of policy easing in Europe this year.
The Price
The EUR/USD price rose 0.5% today to $1.1717, the highest since 2021, with a session-low at $1.1653.
The euro closed up 0.45% on Wednesday, the fifth daily profit in a row, and the longest such streak of daily gains in 2025 following the Iran-Israel ceasefire.
The Dollar
The dollar index fell 0.45% on Thursday and expanded the losses for the fourth straight session, plumbing three-year lows at 97.27 against a basket of major rivals.
The decline comes amid renewed concerns about US financial stability as Trump attacks Powell once more.
Trump attacks Powell
Trump once again criticized Powell for refusing to cut interest rates, and asserting Powell will leave his position soon.
Powell told the Senate of the need to be cautious with monetary policies, as Trump’s tariffs represent a risk to inflation.
The Wall Street Journal reports that Trump is considering choosing and announcing his successor by September or October as a way to undermine him.
European Rates
ECB President Christine Lagarde hinted at the possible end of the current cycle of policy easing, which was in response to a combined shock such as the Covid 19 pandemic, the Ukrainian war, and the energy crisis.
According to a Reuters source, most ECB members now aim at holding interest rates unchanged in July, with the global markets now expecting just an additional 25 basis points of rate cuts by the end of the year.
The odds of a 0.25% ECB rate cut in July now stood below 30%, with traders awaiting more eurozone data and remarks by ECB officials to gather more clues.
Yen rises as Trump attacks Powell once again
The yen rose in Asian trade on Thursday against a basket of major rivals, resuming gains against the US dollar and approaching a two-week high as the greenback suffers.
The dollar skidded to three-year lows on renewed concerns about US financial and monetary stability after renewed attacks by President Trump on Fed Chair Jerome Powell.
The latest Bank of Japan’s policy meeting also tanked the odds of an interest rate hike in July, with traders now awaiting more data to gather clues.
The Price
The USD/JPY price fell 0.4% today to 144.57, with a session-high at 145.26.
The yen lost 0.2% on Wednesday against the dollar after a 0.85% surge in the previous session away from six-week lows at 148.03.
The Dollar
The dollar index fell 0.45% on Thursday on track for the fourth straight loss, plumbing three-year lows at 97.27 against a basket of major rivals.
The decline comes as the US dollar faces accelerating selloff waves due to concerns about financial stability.
Trump Attacks Powell
Trump once again criticized Powell for refusing to cut interest rates, and asserting Powell will leave his position soon.
Powell told the Senate of the need to be cautious with monetary policies, as Trump’s tariffs represent a risk to inflation.
The Wall Street Journal reports that Trump is considering choosing and announcing his successor by September or October as a way to undermine him.
Japanese Rates
The odds of a Bank of Japan’s 0.25% interest rate hike at the July meeting stood at just 40%.
Traders now await important Tokyo data on inflation, unemployment, and retail sales to gather additional clues.
Soybean prices close lower as growth conditions improve
Soybean price tumbled on Wednesday at the Chicago Exchange on expectations of weather improvement in US agricultural areas, pressuring soybean futures.
Climate experts expect cooler and wetter weather conditions east of the Mississippi with intense rainfall on Iowa, Minnesota, and Wisconsin next week.
Such conditions would reduce the negative impact of the recent heat waves in the US and boost production.
An Argus report also noted that corn in particular is facing additional pressures due to the expectations of excellent harvest in Brazil.
Now traders await the crucial USDA report on the size of land available for agriculture in the US, with a higher than expected reading pressuring grain prices even further.
Drop in Ethanol Production
The EIA also reported a drop in US ethanol production last week to 1.081 million bpd, down 28 thousand bpd from the previous week.
Ethanol inventories rose by 286 thousand barrels last week to 24.4 million barrels.
Corn
On trading, corn futures due in December fell 1.5% to $4.22 a bushel.
Soybeans
Soybean futures fell 1.8% to $10.18 a bushel.
Wheat
Wheat September futures fell 1.4% to $5.44 a bushel.