Trump vs. Powell slams dollar, sends gold to record $3,500 as Bitcoin holds steady

Gold blasted past $3,500 a troy ounce for the first time ever on Tuesday after Trump escalated his feud with Federal Reserve chair Jay Powell, kicking the legs out from under the US dollar and shaking global markets.

The surge came after Trump posted on Truth Social Monday night, labeling Powell “Mr Too Late” and demanding the Fed cut rates “NOW.” The clash raised investor fears over the economy and sent traders straight into haven mode.

Investors scrambled to park their money somewhere less exposed to the chaos in Washington. Trump, now back in the White House, reignited pressure on Powell just days after the Fed Chain warned that the administration’s tariff blitz could increase inflation and slow down growth.

The rising tension between the president and the central bank rattled an already jittery market still dealing with the fallout from US trade policies.

Trump’s post tanks dollar and stocks, lifts gold

Markets didn’t wait to react. The S&P 500 dropped 2.4%, while the Nasdaq cratered 2.6%. Over in Europe, the Stoxx Europe 600 lost 0.7%, and London’s FTSE 100 opened flat.

The dollar index, which compares the greenback against a basket of major currencies, slipped another 0.2%, dragging its yearly decline close to 10%. The yen strengthened past ¥140 per dollar, something that hadn’t happened since last September.

Trump’s repeated attacks on Powell go back years, but this fresh wave of criticism comes at a time when Fed credibility is already under stress. Analysts at RBC said:

“Headlines about Trump’s pressure on the Federal Reserve, questions about its independence and his ability to fire Powell — regardless of the outcome — have added uncertainty to a market already flush with uncertainty.”

The bond market barely budged, though it wasn’t calm. 10-year Treasury yields edged up 0.02 points to 4.43%, and the 30-year yield rose the same to 4.93%. The minimal move reflected caution more than confidence.

The Fed kept rates steady this year after three straight cuts in 2024, including a large 50-basis-point drop in September. The next meeting is in May, and it now carries even more weight as investors watch whether Powell holds firm or flinches under Trump’s pressure.

Powell’s job is also now a bigger question mark. Trump hasn’t been subtle about wanting him gone, and some economists warned that any move to oust him before his May 2026 term ends could hurt the economy even more.

Michael Feroli, chief US economist at JPMorgan Chase, said, “Any reduction in the independence of the Fed would add upside risks to an inflation outlook that is already subject to upward pressures from tariffs and somewhat elevated inflation expectations.”

Gold didn’t just climb on drama. It’s been rising all year, up 33% since January. Some investors use it to guard against inflation. Others just want something that doesn’t involve the Fed or the dollar. Data from Standard Chartered showed that more than $19 billion flowed into gold-backed ETFs in the first quarter alone.

The dollar index, stuck at 98.33, hovered just above its lowest point since March 2022, after sinking to 97.923 the day before. The greenback keeps falling as investors flee US assets or hedge against potential rate cuts.

Meanwhile, Bitcoin barely moved. At press time, it sat at $88,481, looking tame compared to the chaos in fiat markets. The crypto king has disappointed traders so far in 2025. It reached $100,000 but failed to stay there. Now it’s coasting just below resistance around $90,000. A push of less than 5% could send it testing $92,540, the high from February 25.

Two momentum indicators—Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD)—both point to a possible bullish turn. But for now, Bitcoin is steady, not spectacular.