empty
 
 

Forex Analysis & Reviews: Powell's comments put gold back in rally mode
time 01.12.2022 02:15 PM
time Relevance up to, 02.12.2022 01:06 PM

This image is no longer relevant

Gold prices rose Wednesday as market participants reacted to Fed Chairman Jerome Powell's speech at the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution in Washington.

This image is no longer relevant

Market participants listened attentively to his words, hinting at the dynamic changes in the monetary policy of the Federal Reserve System.

However, it should be noted that the reaction of investors in general seems to be focused on the fact that they were hoping to hear that the Fed will start raising rates at a slower pace, and not that the Fed will take longer to reach their target.

"It is likely that restoring price stability will require holding policy at a restrictive level for some time. History cautions strongly against prematurely loosening policy. We will stay the course until the job is done," Powell said.

Powell's speech on Wednesday eased investors' concerns as they reacted to other members of the Federal Reserve who announced an upcoming rate hike. In particular, James Bullard's recent remarks underscored the Fed's hawkish intent. Last week, he commented on the need to raise the Federal Reserve's base rate to 7% to fight inflation. He said this week that "the Federal Reserve will likely need to keep its benchmark policy rate north of 5% for most of 2023 and into 2024 to succeed in taming inflation."

Powell's statements in no way contradicted statements made earlier by Bullard and other members of the Federal Reserve in his prepared speech. However, the chairman was able to deliver the message in a much softer tone. Powell essentially sealed a 50 basis point rate hike at the December FOMC meeting. However, he stressed that a slowdown in rate hikes would require the Fed to maintain restrictive monetary policy for a longer period.

Gold's recent rally from $1,621 to nearly $1,800 is a reflection of a major shift in investor sentiment in the market. This suggests that investors are paying close attention to inflation and reducing inflation to restore price stability will be a multi-year process.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2023
EURUSD
Euro vs US Dollar
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Start trade
Start trade

InstaForex分析评论将让您充分了解市场趋势! 作为InstaForex的客户,您将获得大量的免费服务以实现有效的交易。

  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $1000 more!
    In February we raffle $1000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

The euro sets a bad example

The European Central Bank was late to the party and is now trying to convince investors that it will be the last to leave. In other words

Marek Petkovich 13:02 2023-02-05 UTC+2

GBP/USD: brief results and expectations

The Bank of England raised its rate by 50 bps to 4%, the highest level since October 2008. However, the Bank forecasts that annual U.K. inflation will fall from

Jurij Tolin 12:59 2023-02-05 UTC+2

Analysis of the trading week of January 30–January 3 for the GBP/USD pair. COT report.

The GBP/USD currency pair has also begun a very strong decline this week. Despite its drop from about a month ago, we also anticipated a decline in the value

Paolo Greco 18:15 2023-02-04 UTC+2

Analysis of the trading week of January 30–February 3 for the EUR/USD pair.

The EUR/USD currency pair has attempted to maintain its recent upward trend once more this week, although, during the past two weeks, it has begun to noticeably drop. About

Paolo Greco 17:39 2023-02-04 UTC+2

The U.S. dollar is losing its appeal as a safe haven: what does this mean for the EUR/USD pair?

A strong U.S. dollar was one of the main headwinds for gold and all precious metals last year as investors embraced the currency as a safe haven. But this forecast

Irina Yanina 16:42 2023-02-03 UTC+2

Weak US jobs data will support equities and put pressure on dollar

Markets continued to take advantage of the positive sentiment that emerged after the FOMC meeting on Wednesday. This is not surprising since the start of the new year, they have

Pati Gani 13:22 2023-02-03 UTC+2

GBP/USD. Overview for February 3. 2023

The GBP/USD currency pair increased as well, though far less significant than the EUR/USD pair. Additionally, this situation ought to have caused traders to pause. Why is the euro strengthening

Paolo Greco 11:20 2023-02-03 UTC+2

EUR/USD. Overview for February 3, 2023

The EUR/USD currency pair was moving in multiple directions on Thursday, but the previous evening it left the side channel it had been in for the previous three weeks

Paolo Greco 10:47 2023-02-03 UTC+2

Bitcoin rallies on Powell's remarks

Bitcoin's 40% rally in January, the best in a month since 2020, massive capital inflows into cryptocurrency-focused ETFs, and a $250 billion increase in market capitalization over the past four

Marek Petkovich 10:17 2023-02-03 UTC+2

EUR/USD: demand falls despite latest ECB rate hike

The ECB announced a 0.5% increase in its interest rate and explicitly said that there could be a similar one in March, depending on the economic data that will come

Jozef Kovach 08:21 2023-02-03 UTC+2
现在无法通话?
提出您的问题,用 在线帮助.