Gold Sees More Growth Amid Continuous Currency Devaluation and FOMC Statement

Gold has been in the frontlines as currencies fell during the pandemic. While the US Dollar gained the safe haven status at the start of the global lockdown, the USD eventually lost some traction, further pushing gold to higher highs. From it’s recent lows of 1470.50, the metal commodity reached heights of higher than 1730.

With the devaluation of many currencies, gold is now an attractive hedge investment that can keep investors’ money safe throughout the risk-off events.

Reasons For Gold’s Continuous Rise

According to the editor of ForexLive Adam Button, a number of economic worries such as debt accumulation, inflation, and strong easing of monetary policies have lead to worries in the market. These worries have caused dropping movements in a number of currencies.

However, this doesn’t necessarily mean that gold will reach its all-time high. Button states that gold still hasn’t reached the level of its peak investor interest yet. But once it reaches its 8-year high, it’s possible to expect continuous rising in prices.

What’s In Store For Gold in the Short Term?

Gold was able to reach a high of 1737 but was not able to break the level. The commodity has settled at the 1705 level as of today. However, this may change with the release of the Federal Open Market Committee (FOMC) statement. Gold may rise if ever the US central bank will continue to apply more unconventional means of sustaining the economy.

On the medium term, the precious metal may drop on a pullback with the slow reopening of economies. One such is Australia wherein the government plans to ease on the lockdown laws to steadily continue business operations.  US President Donald Trump has expressed that he also has plans to start reopening the economy in phases.

The price of gold will all depend on the movement of these countries.

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