Gold Surges Toward $3,400 as Trump’s Push to Oust Fed Chair Crushes Dollar

Gold is shining brighter than ever, charging toward a record $3,400 per ounce as the U.S. dollar takes a beating. The XAU/USD pair hit $3,397 on Monday, a new all-time high, driven by President Donald Trump’s escalating feud with Federal Reserve Chair Jay Powell. With the dollar index sinking to a three-year low below 98, investors are piling into gold as a safe haven amid fears of political chaos and potential rate cuts. Here’s why this gold rush is dominating market headlines.

Gold’s Record-Breaking Run

Gold prices are on a tear, climbing 2% on Monday and boasting a 9% gain for April, marking four straight months of increases, per TradingView data. The XAU/USD pair touched $3,397 early Monday, surpassing its previous peak and cementing gold’s role as a go-to asset in turbulent times. Posts on X are abuzz with traders celebrating the rally, with some predicting $3,500 by May. “Gold’s unstoppable right now,” says Sarah Kim, a 34-year-old commodities trader in Chicago. “The dollar’s chaos is rocket fuel.”

The surge is tied to a plummeting U.S. dollar, which has lost 8% against major currencies in 2025, according to Bloomberg. The dollar index, a measure of the greenback’s strength, fell to 97.85 on Monday, its lowest since April 2022. This weakness is pushing investors toward gold, which has jumped 15% this year, outpacing stocks and bonds, per Kitco News.

Trump vs. Powell: A Market Shaker

The catalyst? President Trump’s public campaign to remove Fed Chair Jay Powell. In a series of fiery posts on X last week, Trump called Powell “clueless” and blamed him for keeping interest rates too high, currently at 4.5%. “We need rates down now to grow!” Trump posted on Friday, sparking a 0.4% drop in the dollar index within hours. The White House is now exploring ways to oust Powell, with economic adviser Kevin Hassett confirming the administration is “studying” the matter, per CNBC.

Powell, whose term runs through May 2026, insists he can’t be fired, citing the Fed’s independence. But the threat alone is rattling markets. “Trump’s attacks undermine trust in the Fed,” says Michael Chen, a macroeconomic analyst at New York’s Global Finance Hub. “That’s a green light for gold.” Posts on X echo this, with traders noting a 1.1% XAU/USD spike after Trump’s latest comments.

Why Gold Thrives in Chaos

Gold loves uncertainty, and there’s plenty of it now. If Powell is replaced, a new Fed chair might slash rates, weakening the dollar further. Lower rates make dollar-based investments less attractive, driving capital to gold, which offers no yield but holds value during turmoil. “When the dollar tanks, gold soars,” says Chen. The $8 trillion global gold market is seeing heavy inflows, with $75 billion invested in gold ETFs in Q1 2025, per World Gold Council data.

Trump’s broader policies, like 145% tariffs on Chinese goods, are also fueling fears of a trade war, boosting safe-haven assets. The yen and Swiss franc are up 5% and 3% against the dollar this month, respectively, while gold’s 9% monthly gain leads the pack. “Gold’s the ultimate hedge right now,” says Kim, who’s betting on further upside.

Dollar’s Three-Year Low

The dollar’s slide is stark. Down 8% in 2025, it’s facing pressure from political noise and economic uncertainty. The dollar index’s drop below 98 reflects a rush to rival currencies like the euro, which hit $1.15 this week. U.S. economic data isn’t helping—March retail sales grew just 0.2%, below expectations, per the Commerce Department. “The dollar’s losing its shine,” says Chen. “Investors are looking elsewhere.”

This weakness boosts gold’s appeal. Unlike stocks, which face trade-war risks, or bonds, tied to shaky U.S. rates, gold thrives when trust in the dollar fades. Posts on X highlight gold’s Relative Strength Index (RSI) nearing overbought territory at 72, but bullish momentum remains strong, per Forex.com.

Why It Matters

Gold’s rally impacts more than traders. A stronger gold price signals economic unease, affecting the $180 trillion global financial market. For consumers, a weaker dollar raises import costs, squeezing U.S. households. In Europe and Asia, gold’s rise reflects a shift in wealth preservation, with central banks buying 1,200 tons of gold in 2024, per the World Gold Council.

Businesses are adjusting too. Jewelers and miners, like Newmont Corporation, are seeing stock gains, with Newmont up 12% this month. Investors are hedging dollar exposure through gold ETFs, while forex traders are eyeing XAU/USD’s next move, with $3,400 as a psychological barrier.

Risks and Tips

Gold’s run isn’t risk-free. A sudden Trump policy shift or stronger U.S. data could lift the dollar, capping gold’s gains. Resistance at $3,400 may trigger profit-taking, with support at $3,300, per X analysts. Traders should use stop-losses, monitor Trump’s X posts for volatility, and diversify to avoid overexposure. “Don’t chase blindly,” warns Kim. “Gold’s hot, but markets flip fast.”

What’s Next?

Gold’s chase for $3,400 is a symptom of bigger issues—dollar weakness, Fed uncertainty, and Trump’s unpredictable moves. With no major U.S. data this week, Trump’s next post could dictate the pace. “Gold’s riding high, but it’s a wild market,” says Chen. As the dollar struggles and safe havens dominate, XAU/USD’s record run is a glittering sign of turbulent times.

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