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Gold jumps to $2,075 on dovish Fed remarks

The gold spot price rose to $2,075 an ounce on Friday, recording a new all time high, after dovish comments from Federal Reserve Chair Jerome Powell. In a speech, Powell said the risks of the …

The gold spot price rose to $2,075 an ounce on Friday, recording a new all time high, after dovish comments from Federal Reserve Chair Jerome Powell.

In a speech, Powell said the risks of the Fed moving too far with interest rates have become “more balanced” with those of not tightening enough.

His remarks reaffirmed the central bank’s intent to take a cautious approach to future hikes. Investors saw this as bullish for non-yielding gold. Bullion demand was also lifted by downbeat Asian purchasing managers’ index figures that renewed global slowdown fears.

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It will be interesting to see where the gold price goes from here. The more likely scenario is that it corrects before pushing higher by year-end.

The Fed meets December 12-13 and is expected to leave rates unchanged for a third straight meeting. Powell said it’s still too early to declare victory on inflation, but there are signs of progress. He reiterated the Fed is prepared to tighten further if appropriate.

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