Gold Gets Support From Multiple Sides
On Thursday (3/20) morning, Fed Chairman Jerome Powell gave his projections for slower US growth and higher inflation this year, while keeping interest rates unchanged.
Powell said his base case is that any increase in inflation driven by tariffs will be "transitory," but then added that it would be very difficult to say with certainty how much of the inflation is coming from tariffs versus other factors. He also said the possibility of a recession has increased, although not high.
On the one hand, we have seen that the results of the trade war and Trump's tariffs on several countries have not had a good impact on America or global trade. With Powell's statement, it can be concluded that there is an increase in inflation, although he is still not sure it is coming from the tariff war, so interest rates will continue to be kept unchanged.
Gold itself has actually strengthened in a high interest rate environment, this metal has survived when US interest rates are currently at 4.25% - 4.50% which means that when the Fed kept it overnight it was not a significant obstacle for Gold and became a good environment for its growth. In addition, the tension that is heating up again in the Middle East, especially in the Gaza Strip, has finally made the geopolitical environment fragile and unstable again, making people look for traditional hedging assets as the main choice and the best of all is gold.
Source: (mrv@Newsmaker)
