Gold edged higher on Thursday, lifted by a weaker dollar and growing uncertainty after reports suggested U.S. President Donald Trump was considering replacing Federal Reserve Chair Jerome Powell as early as September-October.
The reports raised concerns over the future independence of the U.S. central bank, boosting demand for safe-haven bullion.
Spot gold edged up 0.1% at $3,334.20 per ounce, as of 0507 GMT. U.S. gold futures rose 0.1% to $3,347.10.
The dollar fell to its lowest level since March 2022, making greenback-priced gold less expensive for overseas buyers.
Powell told a U.S. Senate panel on Wednesday that while Trump鈥檚 tariffs may cause a one-time price hike, the risk of persistent inflation is significant enough for the Fed to be cautious about further rate cuts.
鈥淭rump clearly wants a dovish Fed Chairman next time around, so the increased likelihood of an aggressive rate-cutting cycle is pinning down the USD,鈥 KCM Trade Chief Market Analyst Tim Waterer said.
Bullion tends to do well during periods of uncertainty and in a low-interest-rate environment.
Gold dips as geopolitical tensions ease
On Wednesday, Trump called Powell 鈥渢errible鈥 and said he is considering three or four candidates for the top Fed post.
Meanwhile, The Wall Street Journal reported that Trump has even toyed with the idea of announcing Powell鈥檚 potential successor by September or October.
Markets are awaiting U.S. GDP print due later in the day, while also keeping a watch for data on Personal Consumption Expenditures (PCE) on Friday, for cues on Fed鈥檚 rate cut trajectory.
A ceasefire between Israel and Iran appeared to be holding on Wednesday as Trump, at a NATO summit, praised the swift end to the 12-day conflict and said he would seek a commitment from Iran to end its nuclear ambitions at talks next week.
Spot silver edged up 0.1% to $36.34 per ounce, platinum firmed 1.6% to $1,376.64, while palladium surged 4.2% to $1,102.05.