Gold surges 3.5% as dollar tumbles after Powell's remarks
Gold prices rose on Wednesday as the dollar fell against most major rivals, and after Fed Chair Jerome Powell’s remarks on the trade war.
US President Donald Trump ordered a full tariff review of US critical minerals imports in another escalation in his trade war with global trade partners.
Trump said that US reliance on mineral imports raise national security risks and hurt defense capabilities and price stability, hinting at potential tariffs at some of these imports.
Otherwise, Fed Chair Jerome Powell said that tariffs and the ongoing trade war between the US and the world, especially China, could weaken the Fed’s ability to contain inflation and boost US growth.
Powel expects inflation to rise and growth to slow down, but it’s still not clear which one of them needs more focus amid trade uncertainty.
Powell said the Fed is assuming a wait and see stance until the dust clears before taking a monetary policy decision.
He also expects the economy to move away from full employment and contained inflation targets due to the impact of tariffs.
Separately, the dollar index fell 0.9% as of 19:50 GMT to 99.3, with a session-high at 100.1, and a low at 99.1.
On trading, gold spot prices rallied 3.5% as of 20:04 GMT to $3354.8 an ounce.
Fed Chair: Trade war could constrain efforts to control inflation
Fed Chair Jerome Powell said that tariffs and the ongoing trade war between the US and the world, especially China, could weaken the Fed’s ability to contain inflation and boost US growth.
Powel expects inflation to rise and growth to slow down, but it’s still not clear which one of them needs more focus amid trade uncertainty.
Powell said the Fed is assuming a wait and see stance until the dust clears before taking a monetary policy decision.
He also expects the economy to move away from full employment and contained inflation targets due to the impact of tariffs.
US dollar wallows near three-year nadir before Powell's remarks
The US dollar fell in European trade on Wednesday against a basket of major rivals, resuming losses and approaching a three-year nadir as the US-China trade war escalates.
Fed Chair Jerome Powell is scheduled to speak today in Chicago on the economic outlook amid President Donald Trump’s aggressive tariffs, and could provide new clues on the path of US interest rates this year.
The Index
The dollar index fell 0.75% today to 99.35, with a session-high at 100.11.
On Tuesday, the index rose 0.45%, the first profit in four days away from three-year lows at 99.01.
The Trade War Escalates
On April 9, the US government told Nvidia it’ll need a license to export its chips to other countries, with a $5.5 billion charge now linked to the company’s GPU exports to China.
The H20 Nvidia chips are AI chips designed for China and adhere to US export limits, and made Nvidia earnings between $12 billion and $15 billion in 2025.
Nvidia warned that chip sales in China fell sharply last year as the competition expanded, chiefly from Huawei.
US President Donald Trump ordered an investigation into all basic metals, chips, and pharmaceutical imports, in preparation for potential tariffs, while Chinese authorities banned local airlines for shipping Boeing aeroplanes.
US Rates
Federal Reserve official Christopher Waller wanted that recession risks outweigh inflation risks, and if current average 25% tariffs continued, inflation could hit a peak of 5%.
Atlanta Fed President Raphael Bostic also warned from ongoing uncertainty due to tariffs and other policies that could push the economy into recession.
According to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut in May stood at 17%.
The odds of such a cut in June stood at a much bigger 73%.
Gold approaches $3300 for first time ever
Gold prices rose in European trade on Wednesday on track for the second straight profit, hitting a fresh record high and approaching $3300 for the first time ever on strong haven demand as the US-China trade war escalates.
Fed Chair Jerome Powell is scheduled to speak today in Chicago on the economic outlook amid President Donald Trump’s aggressive tariffs, and could provide new clues on the path of US interest rates this year.
The Price
Gold prices rose 2% today to $3295 an ounce, a record high, with a session-low at $3229.
On Tuesday, gold rose 0.6% on Tuesday, the fourth profit in five days amid uncertainty on US President Trump’s tariff policies.
The Dollar
The dollar index fell 0.7% today to near three-year lows against a basket of major rivals, making dollar-denominated gold futures more attractive to holders of other currencies.
The losses amid a loss of confidence in the US economy, prompting investors to dump American assets and seek other havens such as gold.
The Trade War Escalates
On April 9, the US government told Nvidia it’ll need a license to export its chips to other countries, with a $5.5 billion charge now linked to the company’s GPU exports to China.
The H20 Nvidia chips are AI chips designed for China and adhere to US export limits, and made Nvidia earnings between $12 billion and $15 billion in 2025.
Nvidia warned that chip sales in China fell sharply last year as the competition expanded, chiefly from Huawei.
US President Donald Trump ordered an investigation into all basic metals, chips, and pharmaceutical imports, in preparation for potential tariffs, while Chinese authorities banned local airlines for shipping Boeing aeroplanes.
US Rates
Federal Reserve official Christopher Waller wanted that recession risks outweigh inflation risks, and if current average 25% tariffs continued, inflation could hit a peak of 5%.
Atlanta Fed President Raphael Bostic also warned from ongoing uncertainty due to tariffs and other policies that could push the economy into recession.
According to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut in May stood at 17%.
The odds of such a cut in June stood at a much bigger 73%.
SPDR
Gold holdings at the SPDR Gold Trust remained unchanged on Tuesday at a total of 953.15 tons, the highest since September 20, 2022.