Gold Price Forecast: XAU/USD to hit $1900 as Powell is all-in on transitory inflation – TDS
|Chair Powell broadly did not express concerns about inflation in his Jackson Hole remarks. No evidence that expectations of inflation are being de-anchored from the 2% level. This narrative should be positive for gold, in the view of Bart Melek, Head of Commodity Strategy at TD Securities.
Powell’s narrative emphasising transitory nature of inflation a positive for XAU/USD
“Seems that Chair Powell will run the economy hot to achieve full employment, which may take a while longer particularly for disadvantaged social groups. This likely means that any taper will be gentle and policy rates will remain very accommodative for quite a while.”
“With no imminent attack on inflation, nominal rates have no reason to spike and inflation expectations may well edge higher. The resulting firmly negative rates should be a positive for gold.”
“A technical move to the low $1,830/oz seems in the cards in the not too distant future, with even higher levels ($1,850-$1900/oz) as we move into early 2022 and taper is well managed.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.