Gold Slips as Trump Calms Powell Concerns and Dollar Gains

Gold prices edged lower on Thursday as the U.S. dollar gained strength, following remarks by former President Donald Trump that reduced fears of a potential Federal Reserve leadership shake-up. His reassurance regarding Fed Chair Jerome Powell's position helped calm markets and shifted investor sentiment away from safe-haven assets like gold.

Dollar Strength Pressures Gold as Market Sentiment Improves

Spot gold (XAU/USD) fell to around $3,340 per ounce, retreating from recent highs. Trump’s statement that he had “no intention” of removing Powell was seen as a stabilizing signal, especially amid recent political uncertainty. The U.S. Dollar Index (DXY) responded by climbing to its highest level in nearly a month, making gold more expensive for holders of other currencies and pressuring bullion prices.

Stable Inflation Data Limits Immediate Rate Cut Bets

Adding to gold's retreat, the June Producer Price Index (PPI) showed no change, suggesting stable input costs at the manufacturing level. While this helped cool inflation concerns, it also reduced expectations for immediate interest rate cuts by the Federal Reserve. With inflation appearing more controlled, the central bank is seen maintaining its current stance for longer—supporting the dollar and limiting gold’s near-term upside.

Outlook: Gold Faces Mixed Signals

Although geopolitical risks and long-term economic uncertainties continue to provide some support for gold, the current market mood has shifted toward risk-on. Analysts believe gold may trade within a consolidation range unless the dollar weakens or new political or economic shocks emerge.

In the near term, traders will closely watch upcoming U.S. inflation reports and Fed meeting minutes for additional clues. Unless market sentiment changes significantly, gold is likely to remain under pressure as the dollar holds firm.

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