Gold continues the rally higher and struck yet another record high on Thursday as the dollar remained weak and the Feds pledged to maintain the loose monetary policy to support growth.
Despite saying they will end the $600 billion of bond purchases in June as planned, the feds still provided the support gold needed with rates pledged to remain near zero. The feds said growth is moderate and ongoing with the rise in inflation is “temporal”.
Surely that is a deflating factor for gold, yet with the Core PCE rising more than expected in the first quarter with 1.5% and rates kept low, hedging for now against inflation seems reasonable.
Inflationary pressures are mounting, uncertainty is evident, debt woes prevailing, and Middle East and natural disasters seen and that all will keep the metal poised to the upside with some expecting the metal to head above $1,800 an ounce with the end of the year!
More volatility is expected for gold on Friday, especially after the rally to a new record and ahead of the end of the week.
Investors will eye the flash CPI estimate from Europe at 09:00 GMT with inflation expected rising to 2.7% from 2.6%. Then the eyes will shift to the US at 12:30 GMT with the feds favorite inflation gauge the Core PCE on the queue for March following the rise on the quarter more than expected.
The Core PCE is expected with 0.1% rise on the month and 0.9% on the year.
Originally posted here
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