Gold Prices Surge as Fed Chair Powell’s Remarks Lean Dovish

Investing.com – Gold prices traded higher on Friday as Federal Reserve chairman emphasized the central bank’s plans for .

At 11:06 AM ET (15:06 GMT), for December delivery on the Comex division of the New York Mercantile Exchange gained $20.00, or 1.68%, to $1,214.00 a troy ounce.

In his speech at the , Powell indicated that there was no clear sign of an acceleration above the Fed’s 2% inflation objective and said there did not seem to be an elevated risk of the economy overheating.

“As the most recent FOMC statement indicates, if the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate will likely be appropriate,” he concluded.

Investors took Powell’s speech as a more dovish stance, which seemed to rule out the need for a more aggressive tightening as he suggested a lack of inflationary pressure and put the caveat for further gradual increases in interest rates on a continuation of current economic strength and a strong labor market.

Higher interest rates tend to weigh on demand for gold, which doesn’t bear interest, in favor of yield-bearing investments.

The remarks also weighed on the , extending the greenback’s losses and increasing the demand of the precious metal for holders of foreign currencies.

In other metals trading, rose 1.88% at $14.815 a troy ounce by 11:08 AM ET (15:08 GMT).

traded up 2.28% to $932.00 an ounce, while sister metal rose 2.03% at $794.20.

In base metals, gained 2.05% to $2.709 a pound.

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