President Joe Biden plans to retain Jerome Powell as head of the Federal Reserve, while a steady approach to monetary policy creates new selling pressure for gold prices. For details and expert opinions cryptocoin.com keep reading.
Gold prices fell below critical support after the news
The latest news from the White House has ended months of speculation as markets eagerly await who will be the next Chairman of the US central bank after February. The re-nomination of Jerome Powell put some selling pressure on gold prices as the US dollar rallied on the news. December gold futures were last traded at $1,818.2, down 1.80% on the day. Meanwhile, the US dollar hit its highest level since July 2020.
While market analyst Neils Christensen noted that the news pushed gold prices below the initial support at $1,835, many analysts are watching this price area as it was the breakout level seen earlier this month that took prices to a 5-month high. As gold prices drop below critical support, Darin Newsom, head of Darin Newsom Analysis, says he is looking for the next support at $1,802, adding that a “small top” appears with the US dollar’s recent rise.
Joe Biden, Jerome re-nominated Powell
Along with Jerome Powell, Fed Chairman Lael Brainard was vying to become Chairman of the Federal Reserve. Some analysts think the Lael Brainard nomination will be a bullish prospect for gold. Bill Baruch, president of Blue Line Futures, said in an interview Friday:
Lael Brainard is seen as much more dovish than Jerome Powell and this will likely hurt the US dollar, which will push up gold prices.
Senior analyst Jim Wyckoff makes the following assessment of the Fed chairman and vice-chairmanship nominations:
With Jerome Powell remaining as head of the Federal Reserve, traders and investors think that US monetary policy will stay on its current course, compared to the idea that, as a new Fed chair, Lael Brainard will lean more easily on US monetary policy.
In addition to nominating Jerome Powell as Chairman of the Federal Reserve, President Joe Biden named Lael Brainard as Vice Chairman of the Board of Governors to replace Richard Clarida, and released the following statement:
We need stability and independence in the Federal Reserve if we are to continue to build on this year’s economic success. And after their confirmation, President Jerome Powell and Dr. I am fully confident that Lael Brainard will provide the strong leadership needed for the country’s needs for 20 months.
“As there are three vacancies, there is still some uncertainty ahead”
The re-nomination of Jerome Powell comes as the Federal Reserve begins to normalize monetary policy. Earlier this month, the central bank began reducing its monthly bond purchases. But Jerome Powell said now is not the time to raise interest rates.
Gold prices took advantage of this as markets saw the Federal Reserve was in no rush to raise interest rates even as inflation pressure rose. On the other hand, inflation witnessed the biggest increase in 31 years with 6.2% in October. While Jerome Powell will create some continuity for US monetary policy, some analysts point out that there is still some uncertainty ahead as Joe Biden still has three vacancies to fill. Economists at Capital Economics make the following assessment:
Today’s announcement indicates that we can expect announcements about candidates as early as next month. It is these appointments that can create a more significant change in the monetary policy outlook.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram and YouTube join our channel!
Disclaimer: The articles and articles on Kriptokoin.com do not constitute investment advice. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, asset or service in this article.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.