Gold stabilizes near four-month high as central banks focus
Gold stabilized near the highest level in more than four months as investors weighed in on the future of monetary policy in a post-pandemic world.
Federal Reserve Vice Chairman for Oversight Randal Quarles said on Wednesday it would be It is important for the US central bank to start discussing in the coming months whether it intends to cut back on its massive bond purchases if the economy continues to gain momentum in the wake of the pandemic. Meanwhile, New Zealand has followed in Canada’s footsteps to signal a potential interest rate hike next year as central banks begin to tiptoe away from their emergency monetary parameters.
Gold wiped out losses in 2021 amid signs of rising inflation and a potentially uneven economic recovery as some countries grapple with a resurgence in coronavirus cases. Fed officials have rebuffed against the threat that a spike in price pressures will prove to be lasting, while reassure investors of the central bank’s accommodating position.
“With the assurances from the banks, it is likely that even if inflation is higher than expected, central bankers will continue to be accommodating,” said Avtar Sandu, senior director of commodities at Phillip Futures Pte. “What really matters for gold are real rates,” he said, adding that central bankers would continue to keep rates low, which would be bullish for gold.
Spot gold rose 0.1% to $ 1,898.96 an ounce at 12:48 am in Singapore. Prices climbed to $ 1,912.76 on Wednesday, the highest since January 8. Silver was stable, platinum fell, while palladium rose. The Bloomberg Dollar Spot Index remained stable, after rising 0.3% on Wednesday.