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Gold Steady Near Four-Month High Amid Fed Inflation Comments

imageCommodities2 hours ago (May 24, 2021 09:54PM ET)

(C) Bloomberg. United Kingdom sovereign gold coins sit on a one-kilogram gold bar at Gold Investments Ltd. bullion dealers in this arranged photograph in London, U.K., on Wednesday, July 29, 2020. Gold held its ground after a record-setting rally as investors awaited the outcome of a Federal Reserve meeting amid expectations policy makers will remain dovish, potentially spurring more gains. Photographer: Chris Ratcliffe/Bloomberg

(Bloomberg) — Gold steadied near the highest level in more than four months as investors weighed comments by Federal Reserve officials who sought to soothe concerns about inflation.

Governor Lael Brainard, Atlanta Fed President Raphael Bostic and St. Louis’s James Bullard said they would not be surprised to see bottlenecks and supply shortages push prices up in coming months as the pandemic recedes and pent-up demand was unleashed, but much of those price gains should prove temporary.

Gold is close to erasing this year’s decline as investors turn more bullish on the precious metal, with holdings in bullion-backed exchange-traded funds on an uptrend. While market-based measures of inflation expectations have dipped, traders remain cautious about price pressures as well as flareups in Covid-19 cases in some parts of the world.

“Fed speak continues to support the idea that inflation in the U.S. will be transitory and that is good enough to keep short-term bullish momentum in place for gold,” said Edward Moya, senior market analyst with Oanda Corp. “Gold continues to face resistance from the $1,900 level, so if the dollar stabilizes over the next couple of sessions, bullion might remain steady.”

Spot gold fell 0.2% to $1,876.73 an ounce by 8:25 a.m. in Singapore. Prices climbed to $1,890.13 last week, the highest since Jan. 8. Bullion’s 14-day relative strength index has been above 70 for the past week, a signal to some traders that it’s overbought and due for a pullback.

Silver and platinum dropped, while palladium steadied. The Bloomberg Dollar Spot Index was flat after declining 0.2% on Monday.

(C)2021 Bloomberg L.P.

Gold Steady Near Four-Month High Amid Fed Inflation Comments

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