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Gold Glows After Last Session’s Retreat

·2 minuto per la lettura

As the yellow metal gained in London on Monday, it clawed back losses from the previous session. Jerome Powell, the head of the U.S. central bank, believes that inflation is likely to ease in 2022 and that the central bank is on track to begin asset tapering soon, contributing to the downward trend.

The dollar edged down against gold on Monday, which is usually inverse to gold’s movement. Gold futures rose 0.18% to break over $1,800 an ounce.

Today’s bullish precious metal opening reinforced the expectation that the upward trend will continue on an intraday basis, with our next main target of $1,825 an ounce still ahead.

EM 50 is holding the price from below, while stochastic has also gained positive momentum, which gives them a chance to achieve further gains in the upcoming sessions, remembering that breaking below $1,790 an ounce might press the price to visit 1750 an ounce band before rising again.

Despite this, the greenback stabilized from its steepest weekly loss in more than a month, thus curbing the yellow metal’s upside.

In response to Powell’s remarks about asset tapering, gold rose to its highest since early September 2021 on Friday. He told a discussion panel on Friday that the Fed may start asset tapering soon but be patient with interest rate hikes since employment is still low.

On Sunday, U.S. Treasury Secretary Janet Yellen further disclosed that the world’s largest economy. was not losing control of inflation, which could return to normal by the second half of 2022.

Likewise, Powell said employment remains low and that high inflation is likely to abate next year as the effects of the COVID-19 pandemic subside.

Historically, gold has outperformed most major asset classes in periods of high inflation, however, investors remain wary of investing in the yellow metal as they remain focused on the exit of the Fed stimulus programs and global investors growing preference for Bitcoin.

 

This article was originally posted on FX Empire

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