Gold Prices Spike; Markets Deem Powell Speech Dovish

New York (Nov 28)  While off their highs, gold is holding on to decent gains as Federal Reserve Chair Jerome Powell signals that the Federal Reserve could be close to ending its tightening cycle.

Although Powell was relatively optimistic on the U.S. economy noting at the start the nation is close to achieving price stability and maximum employment. However, for many analysts, the key phrase that gives Powell’s comments a dovish tilt are his views that interest rates are close to neutral.

“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy‑‑that is, neither speeding up nor slowing down growth,” he said in his speech.

The U.S. dollar has dropped sharply with gold pushing past $1,230 an ounce in initial reaction to Powell’s comments. While gold is off its highs the precious metal continues to hold strong gains. February gold futures last traded at $1,226.30 an ounce, up 0.52% on the day.

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