The fact is that Jerome Powell, the chairman of the Fed, at a recent symposium in Jackson Hole did not say anything specific about plans to curtail monetary stimulus measures. Consequently, the purchase of bonds on the market will not stop, and the economy will receive more than a dozen billion of recently printed dollars. In such conditions, the inflation rate will continue to grow. Not surprisingly, gold appreciated, as this precious metal is an effective hedge against inflation.
Against the backdrop of this news from the Fed, the profitability of US "treasuries" and the dollar declined, and risky assets, including oil and stocks, rose in price. At the same time, an ounce of the yellow precious metal is now worth $ 1,817, up from $ 1,781 at the end of the previous week. Note that the 200-day moving average is around $ 1,820 per ounce. If quotes rise to this level, then the next stop of the rally will be the range of 1835-1840 dollars.
It is important to emphasize that Powell decided not to rush to suspend bond purchases, as the coronavirus pandemic raged in the United States and other leading countries due to the spread of the delta strain. Despite the improvement in the US economic situation, there is a risk that a new wave of the pandemic will lead to lockdowns in the near future.
Recall that since March 2020, the American Central Bank has monthly purchased Treasury bonds worth at least $ 80 billion and more mortgage-backed securities for at least $ 40 billion. All this in order to protect the US economy from the consequences of the pandemic. In addition, the Fed is maintaining interest rates at an all-time low of 0.25% -0%. These measures led to the fact that in July the core inflation indicator - the index of personal consumption expenditures (excluding food and energy) increased on an annualized basis by 3.6%, which is a 30-year high. The same index, but taking into account the specified goods, increased by 4.2% compared to the same period last year.
Considering all these factors, the gold rate has every chance to resume the upward trend in the medium term, reaching record highs in 2020 - $ 2060 per ounce.