Global gold prices rose to their highest level in two weeks during Tuesday’s trading, as the dollar weakened following U.S. President Donald Trump’s announcement to dismiss Lisa Cook, a Federal Reserve governor. This move shook confidence in U.S. assets and the Fed’s independence. The price of one ounce of gold increased by 0.4% to reach $3,386 per ounce, up from an opening of $3,366, currently trading around $3,377 per ounce, according to Gold Bullion.

Despite the rise to a two-week high, volatility remains dominant since the start of the week, with the $3,350 level acting as a key support to push prices higher.

On Monday, Trump took the unprecedented step of firing Lisa Cook over allegations of mismanagement of mortgage loans. Cook denied these claims, stating Trump has no authority to dismiss her and that she will remain in her position.

This dismissal is Trump’s latest attack on the Federal Reserve as he seeks greater influence over its interest rate decisions. Replacing Cook with his own nominee could increase Trump’s sway over the seven-member Fed board, which currently includes two of his nominees: Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman.

Trump’s comments about Cook sparked renewed trader concerns, driving safe-haven flows into gold amid fears he may reshape the Fed into a more dovish body. Any dollar weakness or bond yield declines would likely benefit gold.

Last Friday, Fed Chair Jerome Powell indicated a possible interest rate cut at next month’s meeting, citing rising labor market risks but persistent inflation threats, noting no final decision yet.

Gold’s prospects improve in a low interest rate environment due to falling U.S. government bond yields, reducing the opportunity cost of holding non-yielding gold.

Market focus now shifts to the Personal Consumption Expenditures price index, the Fed’s preferred inflation gauge, due Friday, for clues on rate cuts.

The SPDR Gold Trust, the world’s largest gold-backed ETF, reported holdings rose 0.18% to 958.49 tons on Monday from 956.77 tons on Friday.

Demand from gold-backed investment funds continues to grow, indicating sustained investor interest in gold during this period.