Gold declined on Thursday where the investors seems to act carefully ahead of the Federal Reserve of United States symposium. That event may give several signs such as the asset reduction. 

That commodity was slightly declining by 0.10% to become $1,789.15. At the previous session, it declined by 0.7% where that became the lowest point in a day for more than two weeks. 

The Fed Jackson Hole symposium will be opened someday and the Fed’s leader, Jerome Powell, gave his speech on Friday. Most of the representatives give the clue so far. 

They make a sign that the asset reduction may be started as soon as possible. That is even earlier that what people are expected. COVID-19 is still becoming one of the reasons. 

The Responds from Several Central Banks

Commonly, the coronavirus pandemic continues to fade the economy prospect and doubting this overview. However, the other central banks are still at the front of the Fed.

The example is the Bank of Korea which increases its interest rate because they reduce their policy decision a day before. The rate from that bank on August was 0.75 percent. 

It means that the level was up by 25 point basis from the 0.5% as it’s position before. That data was based on the expectation made by most of the market participants in the industry. 

South Korea Becomes the First Country that Increases the Rate

Until now, South Korea is becoming the first country that Increases the interest rate. It is especially since the COVID-19 pandemic is started. The Fed’s leader, Jerome Powell, indicated a thing. 

He announced on Friday that the central bank may pull some money policies easily before at the end of this year. However, he still predict that the interest rate increase is still too far. 

That speech has been awaited as a part of yearly the Fed Jackson Hole symposium. Powell stated that the economy has been teaching a point when it doesn’t need too many policies support. 

It means that The Fed may start to cut the obligation which they buy every month before at the end of the year. That is as long as the economy progress is continued. 

So far, the Inflation Is Strong

However, it doesn’t mean that the cost increase will be happened as soon as possible. The asset purchase reduction steps and time in the future isn’t bringing the exact time about the rate increase. 

They have been articulating the different test which is tighter substantially. He added that so far and temporarily, the inflation is strong. It is around the target of 2% which is made by The Fed. 

Furthermore, that organization also has a lot of basics to reach the maximum job. That is actually the second branch from the double advices which are made by the Central Bank. 

Besides that, many parties agree that it is needed before the interest rate increase happens. That is why; nowadays the market participants are highlighting this situation before taking an action.

The Rising Inflation is Temporary

Inflation is still becoming an interesting topic to discus and highlight right now. There are so many opinions spread about it and some experts give the different sides of view. 

Powell and also some other representatives think that the rising inflation is just temporary. They made that opinion due to several circumstances and conditions which are happened in the market. 

That is why; Powell may explain everything widely about it in their speech. He will explain the reason why the inflation is just temporary and make the people agree about that opinion. 

It means that at the end the level will be decreased to the target point. However, it needs more time and the market participants just need to wait for everything right now.