Gold strengthened its position on Wednesday morning in Asia. Investors shifted their attention to U.S. inflation data after Federal Reserve’s Chairman Jerome Powell set a less hawkish tone and reiterated that the central bank would tackle inflation.
Gold futures rose 0.01% to $1,818.75 by 11:39 PM ET (4:39 AM GMT). The U.S. currency, which usually moves inversely to gold, fell on Wednesday.
At his Senate Banking Committee hearing for a second as Fed’s chairman, Jerome Powell made interesting comments. He stated on Tuesday that the country’s economy is both healthy enough and in need of a tighter monetary policy.
Fed’s Chairman expects a series of interest rate hikes in 2022, along with other reductions in the extraordinary help the central bank has been providing during the pandemic era. More importantly, Jerome Powell made remarks during a session that included both praise for the central bank’s handling of the economy and criticism over perceived ethical lapses from officials.
Many questions from lawmakers centered on inflation, which is running at a close to a 40-year high. The central bank is expected to raise rates three or four times in 2022 in quarter-percentage-point increments.
Jerome Powell faced some questioning about why the central bank got its inflation call wrong. Fed’s Chairman once more cited issues mostly related to the pandemic.
Senators will ask questions to Lael Brainard on Thursday. President Joe Biden nominated her to serve as Vice-Chair of the Federal Reserve.
Gold and other precious metals
Investors are also monitoring other important information. They now await the U.S. CPI as well as the Fed Beige Book later in the day.
Gold rose on Wednesday, but other precious metals suffered losses. Silver dropped 0.1% and platinum declined 0.4%, while palladium was flat at $1,920.67.
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