The gold commodity was reported increasing several days ago. That happened actually because the Dollar was weakened. The situation was caused by several reasons such as employment data, political situation, and many more again. However, the condition was changed at the present time.
Gold prices corrected to their lowest level in more than a week, after the US Federal Reserve dashed investor expectations. The hope that is likely to be reduced is to provide more stimuli in the midst of the pandemic which is still happening to date.
Initially, the stimulus provided by the Fed would be used to support the coronavirus-hit economy. As we know that this pandemic has hit various sectors of trade and economy. Various currencies have fallen because of it. The promise offered by the Fed is now requested.
Data about the Gold Spot
Gold is one of the most important and main commodities in the world trade market. Apart from it, of course, there are other main commodities such as oil, for example. However, now gold is in the spotlight because it is experiencing a decline in price.
What are the conditions like in the middle of the market? According to current data, spot gold fell 0.8% to $ 1,943.87 an ounce. This came after the commodity fell to its lowest level since September 9 at $ 1,932.36.
US gold futures showed a downward trend of 1.1% to $ 1,949.90. Despite the fact that the Fed is quite dovish, it seems that for the gold market it is not dovish enough. This was conveyed by Bart Melek, the head of the commodity strategy at TD Securities.
There are concerns that with no more Quantitative Easing, there may be some momentum for gold. The Fed vows to keep interest rates near zero until inflation is on a safe path. This pathway will be used to "moderately exceed" the 2% inflation target in recent times.
What about Bullion?
Bullion has risen 28% so far this year. This increase was helped by interest rates that are near zero globally. The demand to hedge against perceived inflation is now being intensified. It is hoped that it will more or less help the situation in the world market.
However, the US central bank also stated that it expects a faster-than-expected economic recovery. It means they expect unemployment to fall faster than expected in June this year. Many expect more clarity on how the Fed plans to fuel inflation in the coming months.
It was stated by the senior analyst of Kitco Metals Jim Wyckoff in a note. This promise was previously made by The Fed in its important speech some time ago. Wyckoff added that investors and market parties see selling pressure in gold and silver.
However, these situations have also invited the metal bulls to step in. It also buys a decline to maintain the overall upward trend in prices, particularly for the commodity sector in gold and silver. The prices of these commodities are still fluctuating.
US Jobless Claims Are Still High
Meanwhile, new US jobless claims remained perched at a higher level last week. This situation indicates a stalled labor market recovery. According to the news, there are several things that make it difficult to reduce unemployment and improve the economy globally.
One of them is due to the temporary suspension of vaccine trials in several countries. It is because the symptoms were found in one of the vaccine volunteers. As we all know that the vaccine is one of the great hopes for a better world in the future.
The data showed that the unemployment rate would have fallen compared to if you compared to the 9.3% projection in June. Meanwhile, the Fed interest rates are still the same, and inflation was revised down to 1.0% from 1.5% for this time.
