Hawkish Powell Comments on Tapering Bringing Gold Down Again
ZFX - Gold plunged again after Federal Reserve Chairman Jerome Powell said officials should consider removing pandemic support, potentially paving the way for an earlier-than-expected rate hike.
Powell signaled Tuesday at the Senate Banking Committee that the issue could be discussed at the Fed's next meeting Dec. 14-15, where there will be more information about the novel coronavirus strain.
Powell also discontinued the word "temporarily" to describe very high inflation. The dollar pared sharp losses in response to his comments, which weighed on the precious metal.
Gold plunged last month as investors weighed the prospect of the Fed returning to pandemic-era stimulus amid rising consumer prices, with uncertainty surrounding the impact of the Omicron variant on the global recovery.
The US central bank is currently slated to complete its asset purchase program by mid-2022 under a plan announced in early November to slow purchases by $15 billion a month.
Gold was spotted at $1,778.29 an ounce at 9:39 AM EDT, after dropping 0.6% on Tuesday. The Bloomberg Dollar Spot Index went through a little shift after dropping 0.4% in the previous session. Silver retreated 0.2%, palladium gained 0.6% and platinum is likely to be steady.
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