The price of gold has soared as President Donald Trump signals the markets that US Federal Reserve will take a more hands-off approach to the economy and may even cut interest rates.
Trump has announced he intends to promote two picks to the Fed who are unlikely to push interest rates up or push for more easing.
The president has often criticised the sitting chair Jerome Powell – himself a Trump pick for a seat on the rate-setting Federal Open Market Committee – and has hinted he will not be reappointed when his term runs out.
Gold hits a six-year high
Two other FOMC seats will become open and Trump is putting forward Christopher Waller and Judy Shelton, who are both likely to follow the president’s call to cut rates to boost the economy.
“For the president, these are people who would support his position,” said PNC chief economist Gus Faucher. “The president has the right to appoint people to the Fed who support his view on monetary policy. This is one area where the Senate has rebuffed the president for various reasons.”
Meanwhile, the price of gold has hit a six-year high climbing to $1,439 an ounce, the highest price since 2013.
The jump followed the biggest one-day rise in gold for three years and the markets expect there’s more to come for the precious metal.
Record peaks for Wall Street
Analysts see trade wars between China and the US, Japan and Korea and possibly the UK and the EU as possible investment risks.
But the doubts have not spread to Wall Street, where the three major US stock indices all closed at record highs on the back of signs the US economy is slowing.
The Dow gained 179.32 points to close at 26,966, the S&P ended the day at 2,995.8 and the NASDAQ at 8,170.
The FTSE was a little more subdued, opening on Thursday (July 4) down three points at 7,606 – lagging the record high of 7,792.56 seen in January 2018, but at the highest level for 11 months with the markets expecting a Bank of England interest rate cut.