Gold price fall by 2.5% over rising value of the dollar
Gold prices fell by 2.5% on Monday losing $50 an ounce on the back of the rising value of the American dollar.
The rise in the value of the dollar followed the re-appointment of the US Federal Reserve Chief, Jerome Powell. Accompanying the rise in the value of the dollar was the rise in the yields of US debt instruments.
The higher yields and dollar strength combined to drive gold lower. A report from the White House stated that President Joe Biden is “fully confident that Chair Powell and Dr. Brainard will demonstrate strong leadership that America needs.”
The re-appointment of Jerome Powell gives President Biden, the chance to reshape the Federal Reserve as three vacancies on the board of governors needs to be filled.
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The movement of many of today’s markets, including the sale of gold and sharp rises in 10-year and 30-year Treasury notes, are linked to the comments made by public officials.
According to the US Federal Reserve, US interest rates could be raised by the end of 2021, expressing concern about the level of inflation.
According to President James Bullard of the St. Louis Federal Reserve, the US Fed might have to accelerate its tapering process which began this month so that interest rates can be raised sooner than anticipated in an effort to temper rising inflationary pressures which further added selling pressure on the yellow metal momentarily.
