Gold lost some of its positions after Fed’s Chairman, Jerome Powell, finished his speech. Experts are worried that this metal will further decline, which has significantly weakened following its recent growth.
On the evening of February 23, yellow metal’s futures with delivery in April 2021 sharply fell. The reason lies in investors’ fears about the future of monetary policy after the speech of the Fed’s head, Powell. During a meeting in the US Congress, he emphasized that the US economy is showing signs of recovery, but the regulator will maintain the previous soft monetary policy. It is believed that the current situation will remain for a long time, until full employment in the US labor market is restored and the inflation target of 2% is reached.
April gold futures currently declined by 0.1%, that is, to $ 1805.90 per ounce. During the trading session, they surged to $ 1815.20, the highest level recorded on February 16. Now, experts consider the support level of the precious metal to be $ 1759 per ounce, and the resistance level is $ 1815.05 per ounce. Analysts think that gold’s price will remain around the level of $ 1,800 per ounce in the near future. It should be recalled that the indicated metal drop below the June low of $ 1,760 last week. But this morning, it is trading at $ 1808 per troy ounce, making an attempt to further rise.
On another note, the futures for the USD Index, which shows the ratio of the US currency to a basket of six key currencies, increased by 0.15%, reporting to $ 90.138. It is worth noting that gold historically correlates with the dollar and rises in price when the latter declines. In this case, experts believe that the weakening dollar will be beneficial for the yellow metal. If so, gold may return to the level of $ 1800.
During the previous rally, prices of the precious metals reached the highest weekly level, but then the optimism ended. Nevertheless, the interest in gold is currently rising. And although investors are worried that the growth of yields of US Treasury bonds will negatively affect the demand for risky assets, and as a result, gold’s quotes, experts still expect the stabilization of the situation.
The material has been provided by InstaForex Company – www.instaforex.com
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