Gold Rises After Trump Tweet on Interest Rates -- Update
By Ira Iosebashvili
The price of gold rose Wednesday after President Trump renewed his call for lower interest rates, urging the Federal Reserve to cut borrowing costs below zero.
Gold for September delivery closed up 0.3% at $1,494.40 a troy ounce on the Comex division of the New York Mercantile Exchange, snapping a four-day losing streak.
Mr. Trump said on Twitter that the Fed should cut rates to "ZERO, or less." The president has repeatedly criticized the central bank and its chairman, Jerome Powell, for not lowering rates fast enough, saying looser monetary policy would help the economy.
Lower interest rates tend to boost gold, which struggles to compete with yield-bearing investments when borrowing costs rise. Prices for the metal are up around 17% this year, buoyed by worries over slowing global growth and a drop in bond yields.
Fed officials are set to cut rates, likely by another quarter-percentage point, at their Sept. 17-18 policy meeting.
Mr. Powell, who has defended the Fed's independence from political pressure, framed the July decision to lower the Fed's benchmark short-term rate to a range between 2% and 2.25% as a "mid-cycle adjustment."
Meanwhile, U.S. oil prices were down 2.9% to $55.75 a barrel despite a report Wednesday from the Energy Information Administration showing that U.S. crude inventories fell sharply last week as refinery activity unexpectedly picked up.
Prices for Brent crude, the global standard, were down 2.5% to $60.81 a barrel.
Oil prices have fallen for two consecutive sessions as some investors bet that the departure of John Bolton as President Trump's national security adviser will dial down tensions with Iran.
Crude-oil stockpiles fell by 6.9 million barrels to 416.1 million barrels and are now about 2% below the five-year average for this time of year, the EIA said. Analysts surveyed by The Wall Street Journal had predicted crude stockpiles would fall by 2.4 million barrels from the prior week.
While bullish for oil, the data was likely anticipated by the market after the American Petroleum Institute reported a drop in crude supplies, analysts at Citigroup said in a note to clients.
Write to Ira Iosebashvili at email@example.com