Nixse
0

Gold struggles to find direction after Fed’s announcement

The Federal Reserve repeated that it’s committed to doing what is necessary to support the US economy that has been devastated by the coronavirus pandemic. The gold market has been struggling to find momentum after the Fed’s announcement.

The central bank committee stated that the Fed is ready to use its full range of tools to support the economy.

As expected, the central bank left interest rates unchanged at the zero bound range after its monetary policy meeting on Wednesday. It was the first time the Fed had held its regularly scheduled meeting since the start of 2020. Before the COVID-19 forced governments to close down all non-essential services. dollar rolls, federal reserve concept – Finance Brokerage

After the Federal reserve’s monetary policy statement, gold prices were under modest pressure. The precious metal jumped slightly higher. After a short boost, the gold futures got back under pressure. They traded $1,716.9 an ounce, dropping 0.31% on the day.

Fed sees considerable risks to the economic outlook

The Federal Reserve said that the ongoing public health crisis would have a heavy impact. Elements impacted are economic activity, inflation, and employment in the near term. The central bank announced that it would pose considerable risks to the economic outlook over the medium term.

The Fed expects to keep interest rates at the zero-bound range for the near future. According to it, the committee hopes to continue this target range until it is sure that the economy has overcome recent events. Moreover, when it is ready to achieve its maximum price stability and employment goals. 

 

The precious metal’s supply deficit could also cause a rise in prices

Since early March, the central bank of the US has taken unprecedented steps to support the country’s economy. The bank launched several monetary programs that have unlimited quantitative easing measures. 

The Fed will keep purchasing Treasury securities and agency residential and business mortgage-backed securities. 

Lots of analysts opined that Fed’s statements are bullish on gold through 2020. They see the prices hitting record highs as the Central Bank and the government of the United States flood markets with capital to assist the country’s economy. 

Frank Holmes, CEO of US Global Investors, stated that the precious metal’s supply deficit should also provide higher growth in prices.

 

Peter Grosskopf, a strategist at Sprott, said that the world has become full of debt. It is overwhelmed with credit stress, and fiat of currency printing right now. In these circumstances, not having 5% of your household wealth and gold is not safe.

  • Support
  • Platform
  • Spread
  • Trading Instrument
Comments Rating 0 (0 reviews)


You might also like

Leave a Reply

User Review
  • Support
    Sending
  • Platform
    Sending
  • Spread
    Sending
  • Trading Instrument
    Sending