Powell's hawkishness doesn't scare the gold market as uncertainty remains elevated

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Kitco News' general-interest stories takes a look at what is making headlines in the marketplace and how that is impacting precious metals prices

- The gold market continues to trade near session highs as Federal Reserve Chair Jerome Powell reiterated his stance that interest rates will have to be higher for longer, but he provided little new guidance on monetary policy heading into year-end.

"A range of uncertainties, both old and new, complicate our task of balancing the risk of tightening monetary policy too much against the risk of tightening too little. Doing too little could allow above-target inflation to become entrenched and ultimately require monetary policy to wring more persistent inflation from the economy at a high cost to employment. Doing too much could also do unnecessary harm to the economy.

Not only is gold pushing back to within striking distance of $2,000 an ounce, analysts note that its rally is even more impressive given where bond yields are. The yield on 10-year notes is trading at its highest level since July 2007, at 5%. At the same time, Moya noted that gold is also benefiting as the rise in bond yields is creating some credit risks in the market.

 

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