Gold prices perked up this week after US Federal Reserve chair Jerome Powell’s Jackson Hole speech. The yellow metal hit $1,820 /oz, a four-week high, on Monday. Powell hinted that US interest-rate hikes were still some way away. Low interest rates and the threat of inflation are good for gold. In sterling terms, gold cost £1,315/oz this week, down by 5% since 1 January.
The US dollar weakened following Powell’s comments. A weaker dollar is good for gold because the yellow metal is usually priced in dollars. “Gold has gained 4,160% across the last five decades against the dollar”, says Russ Mouldin Shares. Gold bugs spy parallels with the inflationary surge of the 1970s, not least because the US government is again “running welfare programmes… it cannot afford”.
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