If you caught our Wednesday Bulletin you’ll know that this week has seen a tremendous window to buy but, make no mistake that gold is still firmly on the up with the gold bulls grabbing momentum as the week draws to a close. The yellow metal was at a six-week low but has rebound in commanding fashion over the last 24 hours with a £29 ($40) gain as a result of sobering comments from the Federal Reserve Chairman yesterday (Thursday).
Testifying before US lawmakers at the senate, Jerome Powell sounded the warning bell in a couple of areas, stating that inflation was expected to continue at elevated levels and more worryingly, that the economy was nowhere near back to business as usual with persistently higher than desired levels of unemployment. He said that at present, the economy is still “far from full employment.”
He additionally warned, “We have to balance inflation and employment. Our expectation is inflation will come down, and we won’t have to have the two goals in tension. We do think that inflation will remain elevated until supply bottlenecks are resolved. Exactly when that will happen is not possible to say. We should see relief in the next coming months and beginning of next year.”
This dovish stance, which underlines that pre-COVID levels of normality still remain out of reach, favours higher gold prices. The precious metal answered the call with an overwhelmingly positive shift higher, increasing by double digits in the course of trading yesterday to a high of £1,306 ($1,762.80).
With gold showcasing once again its strength and resilience, plus underlining its position as a favoured asset when economic uncertainty hits, don’t delay your purchase.