Powell's Dilemma Helps Gold Skyrocket
Fed Chairman Jerome Powell delivered a speech on the US economy last night to the Economic Club of Chicago, expressing concern about the central bank's current dilemma between controlling inflation and supporting economic growth.
Powell said that with increasing uncertainty over the impact of President Donald Trump's tariffs, the central banker said that while he expects higher inflation and lower growth, it is unclear where the Fed needs to focus more.
This could mean that the US could see some near-term inflation and economic slowdown, and could force the Fed to keep interest rates unchanged.
If we look at the current price increase in gold, much of it is due to the tariff war, inflation concerns and the possibility of a rate cut. So what would happen if Powell keeps interest rates unchanged? even if Powell still maintains his interest rate, the price of gold is believed to still be strong in the $3000 area because this metal has shown its strength in the current high interest rate conditions in America and may even fulfill the predictions of several major world companies that say that the price may be at $3500 by the end of this year.
Source: (mrv@Newsmaker)
