Demand for gold increased, after Fed Chairman Jerome Powell, in his recent speech, stated that the central bank will continue to adhere to a super-soft policy, downplaying the growing threat of inflation.
So, for two consecutive weeks already, gold continues to increase in price, which is favorable for bullish traders.
Like before, Powell believes that inflation will go down, so he and his colleagues are not worried over the sharp increases being observed in the indicator.
In his words, inflation is temporarily increasing due to the sharp recovery of prices, which, during the pandemic, collapsed amid strict quarantine restrictions.
Powell also said that the previous hints of rate hikes and reduced bond purchases are just words so far, as there are not enough conditions to really implement them. He said these moves are still in discussions, and they will notify in advance before making changes.
So, interest rates are likely to remain in the current range until the labor market reaches maximum employment and inflation reaches 2%.
Some market analysts said demand for gold increased because Powell's comments were too "soft".
