Gold prices fell to a one-week low on Tuesday on speculation that the eventual successor to U.S. Federal Reserve Chair Janet Yellen will favour higher interest rates.
“It’s partly (the possibility of a hawkish Fed chair) and that the Fed is going to and needs to hike rates this year that is contributing to a bullish dollar environment,” Martin Arnold, commodities analyst at ETF Securities, said.
U.S. President Donald Trump was favouring policy hawk John Taylor as the next head of the Fed, Bloomberg reported, pushing the dollar higher and lifting U.S. Treasury yields.
PG View: But easier monetary policy would better facilitate President Trump’s economic agenda. He’s already spoken out about the detrimental impact of a stronger dollar, so why would he install a hawkish Fed chair?