08 JULY 2021

Fed Minutes Expose Divided Fed as Gold Powers Above $1,800

Gold prices are up 2,89% ($50) from their one-month low, increasing by $30 in the last five days. ZAR gold prices increased by 3,3% (R832) from their one-month low – on a strengthening U.S Dollar. The drop in Treasury Yields created a tailwind for gold – as yields reached a 3-month low of 1.31%, down from 2021 highs of 1.7%.


This week, investors’ focus moved to minutes of the Federal Reserve Bank’s latest meeting. The minutes, however, echoed a divided Fed struggling with new inflation risks. The division did not help to clarify the Fed’s policy position or provide more information regarding when they expect to reduce monetary stimulus. Consequently, the minutes helped consolidate gold above the $1,800/oz mark. 


Demand for investment gold has jumped recently. Researchers at BullionVault stated that, ‘investors buying gold jumped 40% from May 2021, consequently the demand for securely vaulted gold reached 124% above the 5-year average, the highest increase since Aug 2020, when gold was above $2,000/oz.’


In other gold news, Ohio became the 41st State to abolish sales tax on gold and other monetary metals. State Representative Jim Jordan said to the Sound Money Defense League that, “these efforts are common sense, we should not be taxing money.”


The yellow metal was last seen trading at $1,811/oz.

Jaco Lups