Gold Steady at One-Month High Above $1,810 After Fed Update

2 min read
31 Aug, 21
Written by Clover4X
Article Highlights:
  • Gold trades above $1,810 per troy ounce this week after a peak at $1,823 on Monday
  • Market participants now eye the latest jobs and unemployment reports slated for Friday

Gold Steady at One-Month High

Gold is trading steadily at a four-week high this week after Federal Reserve Chairman Jerome Powell signaled the US central bank will maintain interest rates lower for longer than anticipated.

After Mr. Powell’s speech on Friday, the price of gold advanced more than 1.5% to a weekly high of $1,823 set on Monday. Presently, the price has declined moderately to $1,815 after gold bugs could not finish yesterday’s action in the green.

Gold slipped about 0.3% on Monday to a closing price of $1,810 per troy ounce. Nevertheless, the precious metal climbed to levels last seen in early August as market participants sought a safe haven against the backdrop of a weaker US dollar.

The precious metal, traditionally seen as a hedge against inflation, moved up on Friday following Fed Chair Powell’s comments that higher inflation would prove temporary. Jerome Powell also mentioned the Federal Reserve will not rush to raise rates after it started the tapering process which would aim to reduce the $120bn in monthly asset purchases.

Mr. Powell’s take on the economy and the Fed’s approach, accompanied by geopolitical tensions in Afghanistan, China slowdown concerns, and looming uncertainty around the Delta variant, provided a bullish case for gold prices.

Focus on Upcoming Jobs and Unemployment Data

From a technical point of view, the precious metal remains in positive territory in the short term. On Monday, gold was able to climb and close above the 200-day moving average, a move interpreted as a bullish sign.

In the longer term, gold’s price is virtually unchanged for August, while the year-to-date performance stands at a 5% decline. Gold reached its 2021 peak on the third trading day of the year when buyers pushed the yellow metal to a session high of $1,959 on January 6.

Since then, gold has been on a consistent slide with one attempt to pare the losses in the period from mid-May to mid-June when gold prices spiked to a session high of $1,915 on June 1.

Gold traders and investors now shift their focus on the upcoming jobs and unemployment data, set for release on Friday.

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