Gold prices soared higher in the Asian session after a follow -up statement by Federal Reserve (Fed) Chairman Jerome Powell pressed treasury yields and the US dollar much lower.
Spot gold traded higher at $ 1,816 an ounce in the Asian session, rebounding from the low of $ 1,792 reached during the policy announcement released earlier this morning.
Gold initially fell due to a central bank statement stating that the economy had made progress toward the Fed’s jobs and inflation targets.
However, it rose again after Powell said the labor market was still far from making greater progress.
He also reiterated that the recent rise in inflation was temporary, and this caused US bond yields to fall lower as his comments indicated that the reduction would not be implemented again in the near term.
While Powell acknowledged that policymakers were discussing how a reduction in asset purchases would be implemented, no decision was made following the discussions.
The release of the first US Gross Domestic Product (GDP) estimate data tonight will be the next market focus which is expected to show an increase in the second quarter of this year.
