The precious metal was up at Thursday’s trading session. The major macro pushing gold prices include the U.S Central Bank’s strong commitment to keeping interest rates low until an economic recovery is certain triggered gold bugs grip in the safe haven market.
Gold traders are also waiting for the latest U.S. stimulus measures as well, which could lead to an asset bubble, especially in the commodities market.
At the time of writing this report, Gold futures gained 0.51% at $1,871/ounce. The drops prevailing on the U.S dollar on Thursday also added the needed boost in keeping the yellow metal far above its $1,850/ounce price level.
The U.S central bank policy decision, handed down yesterday after the U.S Federal Reserve two-day policy meeting, continued to emphasize that interest rates will remain near zero for years to come.
The most powerful central bank in the world also affirmed its bond-buying program until “substantial progress” in restoring employment at full capacity and hitting its 2% inflation target is met.
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, narrated the macros affecting gold prices in the near term;
“Gold jumps as the Feds will allow inflation to run hotter through 2023 without tweaking rates higher, as they are prepared to keep rates low even beyond when the whites of inflations eyes become visible. For gold concerns, the optimism over a vaccine is being dulled by the immediate issue of rising case counts on the ground. But as we approach the key $1875 level, the vaccines rolling out can dent gold’s rally, as does the expert call for herd immunity as soon as Q2 2021. “
So, while the precious metal is largely supported by the U.S Federal Reserve resolve on holding interest rates low for the long term, gold bulls are expected to maintain their hold in the near term, amid an era of upcoming quantitative easing measures expected at the world’s largest economy.