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Date:
24th Feb 2021
Author:
Dalmas Ngetich, for CryptoAltum News Team

Gold prices inch higher on light volumes; Stocks are Shaky

FED Chair Jerome Powell failed to guide monetary policy during his Senate Banking Committee hearing on Feb 23. This, however, didn't prevent gold prices from inching higher, building on Monday's gains, albeit with lower trading volumes. The yellow metal's prices are holding up at around $1.8k, propped by relatively low demand for high-risk equities but capped by steady treasury yields and a firmer USD.


Details: 

Traders are confident that the global economy will recover in the coming months, shaking off the effects of the coronavirus pandemic. Governments are stepping up their vaccine administration while concurrently reiterating their desire to keep monetary policy accommodative. Subsequently, this fans inflation concerns, a net positive for gold. In the immediate term, the contraction of funds flowing to high-risk equities is bullish to gold. It is despite the rising treasury yields throttling funds flowing to the low-bearing gold. 


Impact on gold prices: 

Bullish. The yellow metal's prices are firmer in the daily chart and likely to rise in days ahead. Inflation concerns are factors that may force the FED to intervene in the long-term. This may fan demand for gold in the medium-term since rates will remain low and credit cheap for companies and affected individuals.


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