By: Swarnalata
Published on: Apr 23, 2025
In a stunning shift in global markets, the British pound surged to its highest level against the US dollar since September, while gold prices skyrocketed to a record-breaking $3,500 per ounce. This financial turbulence follows renewed criticism from former President Donald Trump targeting the Federal Reserve and its current chair, Jerome Powell.
On Tuesday morning, sterling spiked to $1.342 before stabilizing slightly at $1.3389. The gains were fueled by a sharp sell-off in the US dollar as investor sentiment soured following Trump’s remarks on Truth Social. He slammed Powell’s “wait and see” approach to monetary policy, suggesting that immediate interest rate cuts are vital to sustain economic growth in the United States.
Trump’s message carried weight across global markets. The US Dollar Index (DX-Y.NYB), which tracks the dollar against six major currencies, tumbled to 98.31—its lowest level since March 2022. The slump in the greenback came as investors reacted to both internal policy anxieties and reignited trade tensions between the United States and China.
A Blow to Fed Independence?
Speculation is mounting that Trump is looking into options to remove Powell from his post as Fed Chair. Such a move would mark an unprecedented challenge to the central bank's independence and could cause serious damage to the credibility of US monetary policy. Experts warn that any political interference could spook markets and undermine long-term economic stability.
Why Is Gold Rallying?
Amid the uncertainty, gold soared to $3,500 per ounce for the first time in history, as investors sought safe-haven assets. Traditionally, gold prices rise when confidence in fiat currencies dips, and this week’s events have amplified fears over the Federal Reserve’s ability to operate independently.
“Gold is doing what it does best—acting as a refuge in times of political and economic upheaval,” said market analyst Priya Khanna. “With the dollar under pressure and the Fed’s future direction in question, it’s no surprise we’re seeing record highs.”
What This Means for Traders and Investors
Looking Ahead
With the 2024 US election cycle in full swing, Trump’s influence on market narratives is growing once again. While his calls for rate cuts reflect a common concern among borrowers and investors, the possibility of undermining the Fed’s authority has set off alarms globally.
Market watchers should expect heightened volatility across currencies, commodities, and equities in the near term. Traders are advised to keep an eye on both Washington’s rhetoric and the Fed’s official communications for clues on what’s next.
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