After a two-day policy meeting last week, the U.S. Federal Reserve said it will maintain its accommodative monetary policy (read easy money) and will keep its overnight interest rates near zero and continue to purchase roughly US$120 billion of treasury bonds and mortgage-backed securities each month.
That should be good news for gold. The metal finished February at US$1,743 per ounce (the worst monthly performance since November 2016) and then dipped to a nine-month low of US$1,697 per ounce at the end of the first week of March.
By the end of the third week of March the metal was back up to US$1,744.90 per ounce and as The Northern Miner went to press, gold was hovering at around US$1,739.60 per ounce. The question is where is it headed from here?
Alan Oster, group chief economist at Australia National Bank (NAB), and his colleague Gerard Burg, the bank’s senior economist, said they don’t see big moves in the metal over the next year or two.
“In the near term there appears to be limited upside pressure on gold – given an improving economic climate, and low interest rates that are likely to persist,” they wrote in a research note on March 10.
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