Search

Gold price remains under pressure as Federal Reserve downplays rising inflation - Kitco NEWS

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

(Kitco News) - Gold prices are seeing little movement Wednesday afternoon after the Federal Reserve downplayed rising inflation and reiterated its stance that it is in no hurry to tighten monetary policy anytime soon.

As expected, the U.S. central bank left interest rates unchanged at its zero-bound range between 0.00% and 0.25%. The central bank provided little insight into the health of the economy and said that rising inflation pressures were transitory.

As expected, the U.S. central bank left interest rates unchanged at its zero-bound range between 0.00% and 0.25%. The central bank provided little insight into the health of the economy and said that rising inflation pressures were transitory.

“Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement,” the central bank said in its monetary policy statement. “Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.”

Adam Button, senior currency strategist at Forexlive, said that the central bank’s statement on the economic recovery is not as strong as it could have been.

“There is very little to digest here,” he said.

The monetary policy committee reiterated its stance that it will maintain its current accommodative policies for the foreseeable future.

“With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved,” the central bank said.

Although gold prices are off their session lows, they have not seen much reaction to the latest monetary policy statement and remain under modest selling pressure. June gold futures last traded at $1,774.50 an ounce, down 0.24% on the day.

Katherine Judge, senior economist at CIBC, described the latest monetary policy statement at “uneventful.”

“It will likely take at least a few months of solid job gains to make progress in that regard, as well as evidence that Covid variants aren't derailing the recovery. We'll be listening to Powell's press conference for any hints that the Fed might be getting closer to a position to update their forecasts in a way that pulls the timing of the first rate hike forward, should underlying inflationary pressures in 2022 appear more persistent than they've currently allowed for,” she said.

Let's block ads! (Why?)

Article From & Read More ( Gold price remains under pressure as Federal Reserve downplays rising inflation - Kitco NEWS )
https://ift.tt/3u3z2dw
Business

Bagikan Berita Ini

0 Response to "Gold price remains under pressure as Federal Reserve downplays rising inflation - Kitco NEWS"

Post a Comment


Powered by Blogger.