By Gina Lee
Investing.com – Gold was up on Thursday morning in Asia but slipped just below the four-week high hit in the previous session, as U.S. Federal Reserve Chair Jerome Powell signaled the central bank’s “powerful support” for economic recovery.
On day one of a two-day testimony before the House of Representatives Financial Services Committee on Wednesday, Powell said that monetary policy would remain accommodative. While insisting inflationary pressures were transitory, he added that the Fed expects to continue its bond-buying until there is “substantial further progress” in the job market, predicting that interest rates will likely remain near zero until at least 2023.
Powell’s second day of testimony will take place later in the day.
Rising inflation is going to keep investors on edge, but they are becoming more comfortable about the Fed’s stance and will continue to build positions in the market, ANZ analyst Daniel Hynes told Reuters.
“The conditions are relatively supportive of further gains in gold… It’s not going to be a sprint but a very gentle, gradual trend higher for 2021 at the moment,” he added.
Meanwhile, investors also digested data released earlier in the day in China that further signaled a slowdown in the country’s economic recovery from COVID-19. Second-quarter GDP grew 7.9% year-on-year while growing 1.3% quarter-on-quarter. The data also said industrial production grew 8.3% year-on-year in June and that the unemployment rate was unchanged at 5%.
In other precious metals, platinum eased 0.3% after hitting its highest level since Jun. 16 during the previous session. Palladium fell 0.5% and silver was steady at $26.23 per ounce.
Gold Up, Just Below Four-Week High, Over Powell Dovish Stance
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