Gold prices surged to a two-week high on Tuesday as the dollar weakened following the announcement by U.S. President Donald Trump of the dismissal of Lisa Cook, a member of the Federal Reserve Board. By 00:55 GMT, spot gold rose 0.5% to $3384.34 an ounce, its highest since August 11. December futures increased 0.4% to $3432.40. The dollar index dropped 0.3% against a basket of currencies, making gold less attractive to foreign buyers. Trump took the unprecedented step of firing Lisa Cook, the first African-American woman on the Federal Reserve Board, amid allegations related to two mortgage loans. Federal Reserve Chair Jerome Powell indicated on Friday the possibility of a rate cut at the central bank’s next meeting, citing rising risks to the labor market. The CME FedWatch tool currently shows an 83% chance of a quarter-point rate cut on September 17.

Gold tends to rise when interest rates are cut, as this lowers the opportunity cost of holding a non-yielding precious metal. Other precious metals also rose: silver up 0.4% to $38.72 an ounce, platinum up 0.7% to $1352, and palladium up 1% to $1096.75.