🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

Gold Up, Just Below Four-Week High, Over Powell Dovish Stance

Published 07/15/2021, 01:05 AM
Updated 07/15/2021, 01:09 AM
© Reuters.
XAU/USD
-
DX
-
GC
-
GLD
-

By Gina Lee

Investing.com – Gold was up on Thursday morning in Asia but slipped just below the four-week high hit in the previous session, as U.S. Federal Reserve Chair Jerome Powell signaled the central bank’s “powerful support” for economic recovery.

Gold futures edged up 0.15% to $1,827.75 by 1:03 AM ET (5:03 AM GMT), remaining above the $1,800 mark. The dollar, which usually moves inversely to gold, inched up on Thursday.

On day one of a two-day testimony before the House of Representatives Financial Services Committee on Wednesday, Powell said that monetary policy would remain accommodative. While insisting inflationary pressures were transitory, he added that the Fed expects to continue its bond-buying until there is “substantial further progress” in the job market, predicting that interest rates will likely remain near zero until at least 2023.

Powell’s second day of testimony will take place later in the day.

The Bank of Korea kept its interest rate unchanged at 0.5% as it handed down its policy decision earlier in the day. The Bank of Japan will wrap the week up by handing down its decision on Friday.

Rising inflation is going to keep investors on edge, but they are becoming more comfortable about the Fed’s stance and will continue to build positions in the market, ANZ analyst Daniel Hynes told Reuters.

“The conditions are relatively supportive of further gains in gold... It’s not going to be a sprint but a very gentle, gradual trend higher for 2021 at the moment,” he added.

Meanwhile, investors also digested data released earlier in the day in China that further signaled a slowdown in the country’s economic recovery from COVID-19. Second-quarter GDP grew 7.9% year-on-year while growing 1.3% quarter-on-quarter. The data also said industrial production grew 8.3% year-on-year in June and that the unemployment rate was unchanged at 5%.

In other precious metals, platinum eased 0.3% after hitting its highest level since Jun. 16 during the previous session. Palladium fell 0.5% and silver was steady at $26.23 per ounce.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.