Gold Jumps 2%, Warsh's Comments Trigger Rebound
Gold prices surged 2.1% to US$4,107 per ounce on Wednesday (July 1), after previously hovering near an eight-month low. This increase occurred as investors weighed comments from new Federal Reserve Chairman Kevin Warsh and the latest developments in tensions between the United States and Iran.
At the European Central Bank's annual forum in Sintra, Portugal, Warsh stated that inflation risks and expectations had eased in recent weeks. However, he reiterated the Fed's commitment to returning inflation to its 2% target.
Warsh also reiterated the central bank's focus on price stability. This stance aligns with his statement at his inaugural press conference last month, when he asserted that the Fed would not tolerate high inflation.
Meanwhile, Warsh reiterated his decision to abandon the traditional communication pattern of forward guidance regarding interest rate policy. This move marks a shift in the Fed's approach to signaling to the market.
Nevertheless, market participants still expect a US interest rate hike this year, especially as the labor market remains strong. Meanwhile, investors are also monitoring developments in the US-Iran peace talks in Qatar, although direct negotiations between the two sides remain unlikely.
Source: Newsmaker.id
