Gold and Silver Climb as Federal Reserve Uncertainty Looms Large

 

Gold and Silver Climb Amid Ongoing Fed Uncertainty

(Bullion News Network) – Gold and silver prices increased on Friday during a relatively subdued trading session. Gold gained a little more than $11 per troy ounce, and silver added $0.09/ozt to its spot price. The price action slightly favored gold, driving the gold-silver ratio marginally higher to close the day at 87.58:1. Zooming out, this week was relatively mild compared to some of this quarter’s more volatile trading weeks, with both gold and silver settling close to where markets ended last Friday. Uncertainty surrounding the Federal Reserve remains a chief concern, and more tariff jitters could be driving demand for safe haven assets like gold and silver.

U.S. President Donald Trump ramped up his attacks on Federal Reserve Chair Jerome Powell this week. The American leader has repeatedly implored Powell to cut interest rates, citing falling inflation numbers and a generally strong labor market to justify his position. Powell shows few signs of budging. CME FedWatch projects a probability of just 4.7% that the FOMC will vote to cut rates by 25 basis points at its July 30th meeting. Adding to the controversy are accusations that the Federal Reserve wasted money in its recent renovation of its headquarters. The White House latched onto the issue, and Trump appeared to suggest earlier this week that he plans to fire Powell soon. President Trump later walked the statement back when speaking at a press briefing in the Oval Office on Wednesday:

I don’t rule out anything, but I think it’s highly unlikely, unless he has to leave for fraud.

Still, the controversy may be spooking American markets, especially as inflation begins to show signs of ramping up again. The Consumer Price Index (CPI) rose to 2.7% year-over-year in June, the highest annual rate logged since February. It is not yet clear if growing inflation concerns are a result of Trump’s sweeping slate of tariffs, which have also weighed heavy on traders heading into the second half of 2025. 

Reactions to the busy news week were varied on Wall Street. The Dow lost over 100 points on Friday as traders eyed a fresh set of proposed tariffs on European Union imports, while the S&P 500 moved sideways and Nasdaq posted moderate gains, with the latter setting a fresh record to end the week. This market movement comes on the heels of a fresh round of tariff announcements from Trump, many of which are set to go into effect on August 1st. Uncertainty surrounding these tariffs, as well as the job status of Fed Chair Powell, may serve as a buoy for precious metal prices, which tend to thrive in uncertain environments characterized by high safe haven demand.

Despite the mixed signals, CNN’s Fear and Greed Index finds that markets are being driven by “extreme greed,” a stark contrast to the dour readings of “extreme greed” markets witnessed in early April following the first of President Trump’s sweeping tariff announcements. Safe haven demand for gold and other precious metals remains strong to end the week.