At the close of trading on 26/8, the spot price of gold increased by 27 USD to 3,392 USD per ounce. This marked the highest level since 11/8. As of this morning, the price continues to hover around this mark.

Global gold prices surged on 26/8. Chart: Kitco

The market's upward trend is attributed to increased demand for gold as a safe haven. Investor confidence in the Federal Reserve's (Fed) independence has been shaken after President Donald Trump announced the dismissal of Fed Governor Lisa Cook over allegations of mortgage fraud.

"This news is beneficial for gold, as the Fed remains the main driver of the market," observed Bob Haberkorn, a market strategist at RJO Futures.

This unprecedented move is seen as a test of a US President's authority over an agency renowned for its independence, such as the Fed. Cook later asserted that Trump had "no legal basis or authority" to dismiss her.

Last week, Fed Chair Jerome Powell signaled a potential interest rate cut at next month's meeting. He noted growing risks to the job market. CME's FedWatch tool currently indicates a nearly 90% probability of a rate cut in September.

"If this prediction materializes and the Fed announces another cut later this year, gold prices will continue to rise," Haberkorn emphasized. Gold prices tend to appreciate during periods of low-interest rates or socioeconomic volatility.

Investors now await US GDP data, scheduled for release on 28/8. A day later, the Personal Consumption Expenditures (PCE) index report, the Fed's preferred inflation gauge, will also be released.

In addition to gold, silver and palladium also saw price increases on 26/8, reaching 38.5 USD and 1,102 USD per ounce, respectively. Conversely, platinum experienced a slight decline to 1,340 USD.

Ha Thu (according to Reuters)