Gold prices have held steady in the face of the latest comments from the Federal Reserve. There had been fears that Chairman Jerome Powell would confirm rumours that the looser monetary policy adopted in the face of the COVID-19 pandemic would begin to be tightened but that wasn’t the case on the day.
Speaking yesterday (Tuesday) Chairman Powell struck a cautious note but maintained assertions that inflation was transitory, wouldn’t spiral out of control and reiterated that the damage inflicted by the pandemic was still very much in evidence – subtly underlining perhaps that stimulus measures are here to stay, in a move which favours the gold bulls.
He said, “A significant number of people report not wanting to work because they are afraid to get an infection or are afraid to spread it. Schools are not opened yet. Unemployment insurance may interact with those longer factors and lead to the job search going on longer. Right now, it is about finding a new job. The matching function could be more labour-intensive, and there may be a speed limit on it.”