Gold rises to a two-week high as dollar slips

Spot gold added 0.2% to $3,371.28 per ounce after reaching its highest level since August 11 earlier in the session

Gold rose to a two-week high on Tuesday, as the dollar slid after U.S. President Donald Trump said he was removing Fed Governor Lisa Cook.

Spot gold added 0.2% to $3,371.28 per ounce, as of 0309 GMT, after reaching its highest level since August 11 earlier in the session.

U.S. gold futures for December delivery were steady at $3,418.90.

Trump has put traders a little bit on edge once again with his comments about Fed Governor Cook, which has resulted in gold picking up additional safe haven flows today, KCM Trade chief market analyst Tim Waterer said.

There is a sense that Trump may be reshaping the Fed into a more dovish leaning body, and any resulting dollar depreciation or move lower in yields would likely suit gold, he added.

The U.S. dollar index dropped 0.2% against its rivals, making gold less attractive to overseas buyers.

Trump on Monday took the unprecedented action of firing Lisa Cook over claims of mortgage borrowing impropriety.

On Friday, Fed Chair Jerome Powell signalled a possible rate cut at the U.S. central bank’s meeting next month, saying that risks to the job market were rising but also noting inflation remained a threat and that a decision wasn’t set in stone.

Non-yielding gold tends to appreciate in a low-interest-rate environment, which reduces the opportunity cost of holding bullion.

Focus now shifts to the Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, due on Friday for more cues on U.S. rate cut path.

SPDR Gold Trust, the world’s biggest gold-backed exchange-traded fund (ETF), said its holdings increased 0.18% to 958.49 metric tons on Monday from 956.77 tons on Friday.