Gold traded higher in the Asian session after profiting from a 10 -year fall in U.S. treasury yields and the U.S. dollar following dovish remarks by Federal Reserve (Fed) Chairman Jerome Powell.
Speaking before Congress at the New York session, Powell said inflation has risen significantly and it is likely it will continue to rise in the next few months before declining again.
Following that, the central bank is said to continue to provide strong support until the economic recovery is completed. For now, the Fed will pay attention to improving jobs.
US 10 -year bond yields plunged lower following the statement, falling to 1.33%, from the 1.42% level it reached after US inflation data was released. The depreciation also dragged the US dollar to cut profits following encouraging US inflation data.
This in turn has pushed gold prices higher to a four -week high to trade stronger at $ 1,827 per ounce in today’s Asian session. Meanwhile, gold futures strengthened at $ 1,829 an ounce.
Gold prices have strengthened previously following readings of US inflation data that continued to show higher increases in June, prompting investors to rush to seek protection from the precious metal which is considered an inflation hedge.
