Federal Reserve Chairman Jerome Powell threw a bucket of cold water into the gold rally on Friday and gold prices fell below $1,800. In addition, the price of Bitcoin was pulled to the $ 60,000 limit.
Gold fell below $1,800 with Fed Chairman Jerome POwell’s speech
After a relatively quiet week, mounting inflation pressures helped gold prices rise to a six-week high. Many analysts had expected the precious metal to end the week above $1,800 for the first time since early September. But Jerome Powell’s comments dashed those bullish hopes. Meanwhile, Bitcoin, which has just seen ATH of $ 67,016, also started to decline and at the time of writing, it was withdrawn to $ 60,600 with a daily loss of about 4% on Binance.
In an online conference hosted by the Reserve Bank of South Africa, despite significant robustness and problems, Jerome Powell reiterated his view that the US central bank is on track to reduce its monthly bond purchases before the end of the year . He added that monthly purchases are expected to be finished by mid-2022. On the subject, gold market analyst Neils Christensen shared the following tweet:
Jerome Powell said the US economy is on track to reduce monthly bond purchases, which means this process will be completed by mid-2022.
— Neils Christensen (@neils_C) October 22, 2021
The gold market dropped nearly $30 from session highs after hearing Jerome Powell’s comments. While the Fed Chairman stated that there are risks that the global supply squeeze may keep inflation high until 2022, he stated that the main purpose of the central bank is for supply bottlenecks and that inflation will fall to 2%. Jerome Powell added that despite the uncertainty, the labor market is on track to reach maximum employment next year.