Gold prices rebounded today, Wednesday, after the decline of yesterday’s session. The dollar index fell from a two-month peak against its rivals; Which lowers the cost of gold to holders of other currencies.
A White House official said that testimony given by Federal Reserve Chairman Jerome Powell to Congress on Tuesday evening shows that President Joe Biden’s economic plan is working.
By 07:30 AM GMT, the price of an ounce of gold in spot trading rose 0.2% to $1782.2. Gold futures also rose 0.3% to $1,782.30 an ounce.
Powell reiterated the US central bank’s intention to encourage a “broad and comprehensive” recovery in the jobs market and not rush to raise interest rates based solely on the fear of upcoming inflation.
“We are not going to raise interest rates in a preemptive manner because we fear the possible onset of inflation,” Powell told a US House of Representatives committee hearing. “We will wait for evidence of actual inflation or other imbalances.”
He said that the recent price increases do not warrant raising interest rates because they come from categories that were “directly affected by the reopening of the economy.”
“We’re not going to just look at the overall unemployment numbers, we’re going to look at all kinds of measures,” Powell added. “That’s the most important thing we can do to ensure that the benefits of recovery are shared more comprehensively.”
Gold is a hedge against inflation, and gold prices fell 6%, or $113 an ounce, last week after the Federal Reserve indicated it would soon start reducing its asset purchases, and could start raising interest rates in 2023.
For other precious metals, an ounce of silver rose to $26.02 after rising 0.5%, platinum rose 1.45% to $1088.5 an ounce, and the price of palladium increased 1.52% to $2601.65 an ounce.