Safe-haven gold prices jump as dovish Fed restores safe-haven bid
by SOURAV D | VIEW 1219
On Friday, the precious yellow-metal gold futures’ prices had bounced back more than 1.0 per cent, as US Fed Chair Jerome Powell had clung on to his much-disputed view that a latest uptick in inflation indicators would be transitory and had declined to offer any timeline on when the US Central Bank would begin to ease its bond repurchase program. However, US Fed’s Powell had signalled that there could be an ease of the program as early as ‘this year,’ but his dovish tone had poured fresh scorns over some investors’ optimisms that a substantial scale of taper would be on the cards, restoring a safe-haven appeal for the yellow metal while dampening the American currency. Adding a further bullish bias on gold futures’ prices, Fed Chair Powell was quoted saying in a virtual speech at the annual Jackson Hole conference of Central Bankers late on Friday that the US Central bank would unlikely to raise rate in a near term, as such kind of move from the US Fed would hinder US labour market to reach full employment.
Gold jumps after dovish Powell remarks
Citing statistics, in the day’s commodity market wind-down, spot gold prices jumped 1.4 per cent to $1,817.21 per ounce, while US gold futures’ prices gained 0.9 per cent to $1,819.50 an ounce.
On the week, spot gold prices spiked as much as 2.01 per cent higher, the largest weekly percentage gain since mid-May. Meanwhile, citing that the taper-talks might not emerge until next week’s job report following an utterly dovish Powell remark, a chief market strategist at Blue Line Futures in Chicago, Phillip Streible said, “They’re not going to raise rates anytime soon and taper talk won’t come back into play until next week’s jobs report.
That cleared the path for gold, and as it broke above $1,800, it’s eying the next resistance level at around $1,820”.