The US dollar lost for the 7th consecutive week against the Canadian dollar, trading at 1.3070 following the comments made by Federal Reserve Chair Jerome Powell. Powell recently announced major policy changes that are set to come regarding inflation. Instead of trying to hit a 2% inflation rate as was the regular policy, the central bank will now target an average 2% and allow for higher inflation for the foreseeable future.
When asked about what he hopes, Fed Chair said he would be happy with inflation at 2.25-2.5%, though that is unlikely. As inflation for many items, most notably groceries, is already far above 2%; the rest of the items measured in inflation will catch up over the coming years. As people begin to go outside more, use more transportation, shop more, eat more outside, etc, the cost of doing so will also rise. This new policy is expected to allow for more flexibility over the coming years, but is not enough to help with the current situation where we face a worldwide pandemic.
“That part of the economy will find it very difficult to recover… That is millions of people who are going to struggle to find work. We need to stay with those people… We are looking at long tail of probably a couple of years at least.”
With a weakening US dollar, the price of gold has risen to the highest point in the past 3 weeks and gets ready to test resistance at $2000 USD. If it succeeds, it is likely to continue its growth and climb to new highs. With gold prices changing dramatically, you can always take a look at our website where we keep you up to date with the highest prices you can get for your gold.