Kriptokoin.comAs we have reported as the US Central Bank President Jerome Powell said that inflation expects to relax next year and the US central bank was on its way to reducing the incentive of the Central Bank. Spot gold began to decline after increasing by 1.7 %at the beginning of the session and closed the week at an increase of 0.53 %for $ 1,792.28. The US gold futures increased by 0.81 %and settled for $ 1,796.3 per ounce.
Daniel Pavilonis: Fed will not do enough to slow down inflation and this is where it will find the value of gold
HIGH Ridge Futures Material Trade Director David Meger, underneath the decline under the FED President’s comments on how inflation will potentially rise to the next year. Director makes the following assessment:
However, these two ends are a sharp sword. The ongoing inflationist prints in the market will be the main supporting factor for gold and silver in the coming weeks and months.
Jerome Powell said that the US central bank should soon begin to reduce asset purchases, but that interest rates are not yet necessary to increase interest rates because the employment is still very low. The Dollar Index (DXY) left behind its losses after Jerome Powell’s statements. RJO Futures Senior Market Strategist Daniel Pavilonis makes the following comment:
Inflation is the only thing that everyone speaks today. The Federal Reserve has the perception that it is behind the curve and the precious metal market is looking at it. Because the Fed won’t do enough to slow down inflation. This is where it will find the value of gold.
“Despite strong inflation data and stagflation concerns, gold continues to remain inanimate”
Gold is generally considered an inflation protection, while reduced incentives and interest rate increases increase the cost of opportunities for keeping the ingredients without returning by increasing the returns of government bonds. The euro zone inflation expectations have reached the highest levels of recent years, making additional pressure on the European Central Bank (ECB). However, ECB insists on maintaining the incentives of crisis. The assessment of SAXO Bank Analyst Ole Hansen is as follows:
There was an increase in inflation expectations, which supported gold with a weaker dollar. With this support, precious metal made another attempt to force $ 1,800.
In addition, Ole Hansen says that growth concerns may reduce the possibility of aggressive in interest rate hikes of the central banks, and as a result can help gold, but sharp recovery in stock markets continues to prevent a prevention.
Meanwhile, Atlanta US Federal Reserve President Raphael Bostic said that high inflation expects to last up to 2022 and the Central Bank should increase interest rates until the end of next year, he said. However, Citigroup analysts underline the following in a note:
Despite strong US inflation data and increasing concerns of investors’ risk of stagflation, spot gold transactions remain inanimate. It may be directing a few factors (definitely compared to 2019 and 2020), which seems weaker for gold.
