XAU/USD: Gold Prices Erase Rumor-Driven Gains After Powell Drama Fizzles Out

Bullion rallied roughly 2%, or about $60, when news got out that Trump was getting ready to fire Powell. Turns out, it ain’t so. For now, at least?

🏛️ Wait, Can You Fire Fed Boss?

• Gold prices XAUUSD pulled a full reversal, dropping 1.5% to $3,320 on Thursday after spiking nearly $60 the day before on speculation Trump was preparing to fire Fed Chair Jay Powell. Turns out, the drama had no legs — just loud headlines.
• The initial rally came on pure adrenaline: markets hate uncertainty, and nothing screams “uncertain” like presidential meddling in Fed policy. But with Trump walking back the rumor, traders hit the sell button.
• Powell stays… for now. Gold gave back the gains… for now. And once again, news platforms proved to be more volatile than your favorite chart pattern.

💵 Dollar Strength Throws Shade on Gold

• A firmer dollar added extra pressure, making gold more expensive for buyers using other currencies. It’s the classic inverse relationship — when the greenback flexes, bullion tends to soften.
• Global demand weakened just as gold lost its safe-haven narrative for the day. Without a clear crisis, investors took profit and moved to the sidelines. After all, traders were pricing in a more aggressive Fed boss who would be cutting rates from day one if he could.
• Traders who bought the rumor found themselves selling the fact. The Fed’s next meeting — July 29-30 — is expected to be a rate hold. The meeting in September? Now there’s a high-probability of a rate cut.

📊 All Eyes on Data

• But before that, the next move may come from real numbers, not political theater. Weekly jobless claims and retail sales data are due Thursday, and could re-ignite rate cut hopes (or not, depending on what the print shows).
• If economic data shows signs of cooling, it could give gold fresh legs — weaker growth usually makes rate cuts more likely, and that’s bullish for bullion.
• Until then, the shiny metal is in wait-and-see mode, boasting gains of about 25% since the start of the year, rubbing shoulders with Bitcoin’s BTCUSD 26% increase this year.