[NEW YORK] Gold rebounded over 2 per cent on Friday, a day after a steep sell-off, as the US dollar weakened and the US Federal Reserve signalled a prolonged low interest rate strategy. Read more at The Business Times.
"The Fed said it can allow inflation to run above its 2 per cent target for some time seems like they are going to keep their monetary policy extremely loose, which should help gold." The dollar fell to a more-than one-week low, making gold cheaper for holders of other currencies, and was on track to post its biggest weekly percentage fall since end-July.
Mr Powell said on Thursday the central bank would adopt an average inflation target, meaning rates are likely to stay low even if inflation rises a bit in the future. On the other hand, global central banks and governments have pumped massive stimulus into the market to prop up their coronavirus-damaged economies, helping gold gain over 28 per cent this year.
"The shift in Fed policy will mostly likely reignite 'the inflation trade', which has historically been bullish for hard assets ," Kitco Metals senior analyst Jim Wyckoff said in a note. Low interest rates tend to support gold, which is also a hedge against inflation and currency depreciation.Platinum eased 0.1 per cent to US$927.83, while palladium rose 2.4 per cent to $2,211.96.For daily updates on weekdays and specially selected content for the weekend. Subscribe to
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