Powell said the latest US jobs report shows the process of bringing inflation back closer to the 2% target will take “quite some time”, although there are signs that cost pressures are easing, at least for goods.
Following Powell’s speech, the dollar index fell 0.1%. au$s103,510.
Minneapolis Federal Reserve Chairman Neel Kashkari said Tuesday that the Federal Reserve will likely need to raise interest rates to at least 5.4% to rein in inflation, as the latest January jobs report shows that the measures taken so far have made little dent in the labor market.
Higher rates increase the opportunity cost of holding bullion, which does not earn interest.
Commerzbank analysts forecast gold prices of $1,850 by mid-year and $1,950 by the end of 2023.
In other precious metals, spot silver fell 0.5% to $22.16 an ounce; platinum fell 0.1% to $971.05; and palladium jumped 3.1% to $1,647.87.
What drives the price of gold?
Higher rates increase the opportunity cost of holding bullion, which does not earn interest. Persistent concerns about the economic slowdown also boosted demand for gold as a safe haven.according to analysts.
Gold is considered a safe haven asset. Its ability to preserve wealth and its greater security as an investment, compared to the volatility of paper-denominated currenciesearned him that name.
In general terms, one of the best times to invest it is when the asset trades at a cheaper price. As gold is used as a safe haven asset, Yeah there is a fall in the dollar or there is a forecast that a global crisis will break outgold will always be an advisable investment.
Source: Ambito
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