Gold is up more than 1% after the monetary easing tone from Jerome Powell

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Thursday, July 29, 2021 - 19:30
Point Trader Group

Gold prices rose more than 1% today, Thursday, as investors welcomed statements by Federal Reserve Chairman Jerome Powell, who ruled out raising interest rates in the near future.

And gold rose in spot transactions 1.1 percent to $ 1827.30 an ounce by 1358 GMT, after earlier hitting its highest level since July 16 at $ 1827.95.

And US gold futures rose 1.5 percent to $ 1826.70.

Powell said the US job market still has "some room to recover" before it is time to withdraw support.

"We're going to see higher inflation going forward because the Fed is focused on employment...and this is a positive environment for precious metals," said David Meijer, director of metals trading at High Ridge Futures.

"This is not a quick recovery, it is something more sustainable because nothing stands in the way of gold," he added.

Reinforcing Powell's views, data showed that the US economy grew at an annual rate of 6.5 percent in the most recent quarter, less than the 8.5 percent forecast of economists in a Reuters poll.

Low interest rates in the United States reduce the opportunity cost of holding non-yielding gold.

Silver jumped 2.9 percent to $25.65 an ounce, after earlier climbing to its highest level since July 19.


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