Trump Revives Coal Industry with Pentagon Power Purchases and $175M Funding, While Gold Holds Near $5,050 on USD Weakness

Date: 11 Feb 2026 04:42 PM

President Donald Trump is preparing to issue an executive order that directs the Pentagon to purchase electricity from coal-fired power plants, invoking the 1950 Defense Production Act to justify the move on national security grounds, according to reports from Bloomberg and other sources. This initiative aims to bolster the struggling coal industry by ensuring reliable baseload power for military operations. In tandem with this, Trump plans to announce $175 million in federal funding from the Department of Energy for upgrades at six coal plants located in Virginia, West Virginia, Kentucky, Ohio, and North Carolina. The administration emphasizes coal as a dependable, affordable energy source—particularly during peak demand and extreme weather events—while noting that utilities like the Tennessee Valley Authority are also extending the life of coal facilities to meet growing electricity needs and support job creation in coal-dependent communities. Although coal currently generates less than a fifth of U.S. electricity, these steps reflect a broader push to revive the sector and prioritize energy reliability over emissions concerns.

Gold (XAU/USD) maintains a bullish bias, holding near the $5,050 mark with modest intraday gains during the early European session on Wednesday, as it partially recovers from the previous day's slight losses. Persistent weakness in the US Dollar, driven by heightened market expectations for additional Federal Reserve rate cuts in 2026 (currently pricing in around 58 basis points of easing), continues to provide strong support to the non-yielding precious metal. Recent softer US retail sales data for December, combined with emerging signs of labor market softening, has led economists to revise down Q4 growth forecasts, further reinforcing bets for looser Fed policy. Although renewed concerns over Fed independence—fueled by comments from President Trump and Fed Governor Miran—have outweighed hawkish remarks from regional Fed Presidents Lorie Logan and Beth Hammack, the USD remains under pressure, keeping gold's upside path favored. However, traders appear cautious and reluctant to chase aggressive gains ahead of the key US Nonfarm Payrolls (NFP) report, which could offer fresh direction on the Fed's outlook and USD dynamics, while easing Middle East tensions may limit safe-haven demand and cap any sharp rallies in the yellow metal.

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