Gold futures climbed higher on Friday and are now back above the key $1800 an ounce level amid news that the Federal Reserve will keep rates low for the foreseeable future.
Though Federal Reserve chairman Jerome Powell said Friday morning via a virtual Jackson Hole Symposium that the Fed planned to taper its $120 billion worth of monthly bond buying purchases later this year, he indicated that the Central Bank is still committed to keeping interest rates low. (Story continues below.)
Record low rates combined with recent inflation data has investors worried that inflation will depress the value of the U.S. dollar. Indeed, inflation in consumer prices jumped 5.4% in the most recent CPI report. Producer prices, which often rise ahead of consumer prices, are currently up 7.8%.
Chairman Powell said these indications showed “progress” on inflation but, were not reason enough to change its interest rate policies as of yet.
By mid-day on Friday, the price of gold was trading at $1817.50, showing a gain of $22.30 or 1.24%. When investors worry about dollar, they tend to move into perceived safe havens investments like gold.
