How does it sit in the market?
Gold markets are currently testing the waters around the $1900 USD mark, where it found some support. Gold prices saw a drop of 1.91% over the weekend, even falling below the $1900 mark. This has left many wondering if this trend will continue. At its low on Monday, buyers stepped in and kept barely above the mark at $1903.92 USD. If it were to fall below the $1900 mark, the next psychological support would come at $1800 USD. If this were to happen, it would be a very good time to buy gold. With the recent growth of the American dollar – hitting a 6 week high, gold has taken a hit. in fact, gold has hit its lowest point in 2 months.
Comments by Federal Reserve Chair boost prices
Upcoming events such as the comments from the Federal Reserve Chair will have an impact on gold prices. More can be found in my previous blog. We saw Federal Reserve Chair Jerome Powell’s recent comments at the first day of testimony before Congress. He came out and urged caution, reminding us that we still have a ways to go before we start to see the economy recover.
“A full recovery is likely to come only when people are confident that it is safe to reengage in a broad range of activities. The path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government,” he said.
What can we expect in the future?
He continued, stating that the central bank will continue to stay “committed to using our full range of tools to support the economy for as long as is needed.” However, there was no mention of any future economic stimulus measures. All of this comes roughly a week after the Federal Reserve’s comments on keeping interest rates at 0% until 2023.
The Federal Reserve Chair’s words have helped to increase buying interest in gold & boost it's price. However, gold isn’t expected to show significant growth in the near future.