© Reuters.
Investing.com – The yellow metal extended its gains in early trading on Wednesday, with the US dollar turning lower following the Federal Reserve’s comments on Tuesday about inflation.
And the comments of Jerome Powell, Chairman of the US Federal Reserve, eased the market’s fears about the return of tightening, more than expected, after the strong jobs and unemployment data at the end of last week.
The dollar fell from the highest level in a month yesterday, Tuesday, after Federal Reserve Chairman Jerome Powell repeated his statements last week that inflation had begun to recede, with his expectation of a significant decline in inflation this year.
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gold now
Futures contracts for the yellow metal rose during early trading today, Wednesday, by 0.3%, reaching levels of $ 1890 an ounce, with gains in the range of $ 5.
And gold prices rose in spot trading today, Wednesday, by more than 3 dollars, an increase of 0.2%, to reach levels of 1877 dollars an ounce.
dollar index
Meanwhile, the main US dollar index fell against a basket of major currencies, but it is still trading near its highest level in a month.
The main dollar index fell during these moments of trading today, Wednesday, in the range of 0.1%, to levels of 103.3 points, against a basket of six currencies.
On the other hand, the 10-year yield decreased to 3.65%, with a decline of 0.021 points during these moments of trading today, Wednesday.
steep drop
“We expect 2023 to be a year of sharp decline in the inflation rate, but I think it will take more than this year for inflation to slow near the 2% target,” said Federal Reserve Chairman Jerome Powell.
Powell said in a speech at the Economic Club of Washington that inflation had begun to slow, but he expected that this process would take a long time
Powell said: “The process of deinflation has begun. It has begun in the commodities sector, which represents about a quarter of the size of our economy, but it still has a long way to go. These are the very early stages.”
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You must wait
The Fed chairman noted that it may take until next year for inflation to reach a point the Fed finds comfortable.
Powell believes that more rate hikes are needed to calm inflation and a strong labor market, especially after the latest jobs report.
What happened?
And by the end of trading on Tuesday, it rose for April delivery by 0.3%, or $5.30, at $1884.80 an ounce.
While the dollar index, which measures the performance of the US currency against a basket of six major currencies, fell by 0.1% to 103.462 points.
US stock indices rose at the end of Tuesday’s trading session, with investors’ optimism about the prospects for monetary policy and the economy.
And by the end of trading yesterday, Tuesday, the “industrial” index rose by 0.8%, or 265 points, at 34.156 thousand points.
It rose by 1.3%, or 53 points, to record 4,164 points, and “NASDAQ” rose by 1.9%, equivalent to 226 points, to 12,113 thousand points.
