Gold Rebounds on Weak Dollar With Investors Weighing Fed Policy

The metal rose the most in almost two weeks and the dollar touched a two-year low a day after Fed Chair Jerome Powell said the central bank will seek inflation that averages 2% over time. His comments sent bullion on a roller-coaster ride in the previous session, as he signaled the central bank will stay accommodative for longer, with a more tolerant approach on inflation, but won’t hesitate to act if consumer prices rise considerably above its goals.

Gold strengthened Friday due to “a more measured appraisal of the shift in Fed nuances, along with a weakening dollar, for the same reason,” Rhona O’Connell, head of market analysis for EMEA and Asia regions at StoneX Group, said in an emailed note.

Higher inflation tolerance and low interest rates should see U.S. real yields fall in the medium-to-longer term, which is supportive for gold, said Vivek Dhar, an analyst at Commonwealth Bank of Australia. Still, the fact that the Fed will also act if there are inflationary pressures adds doubt to how high U.S. 10-year inflation expectations can reach, he said.

https://finance.yahoo.com/news/gold-heads-third-weekly-decline-02025571…