Gold remains vulnerable as safe-haven demand missing
Market participants keenly watched a panel discussion involving Federal Reserve Chair Powell, Bank of England Governor Bailey, ECB's President Lagarde and Bank of Japan's Governor Ueda wherein these leaders discussed the economy, interest rates and their respective outlooks. The key takeaways from their discussions and views are that except Bank of Japan, the rest of the three central bankers deem inflation to be way above their respective target levels. Inflation control is their priority and they will continue to remain hawkish to quell the inflationary pressure.
Federal Reserve Chair Powell said that the US economy is resilient, and a downturn is not the most likely case. He added that the Federal Reserve needs to hike twice more. The Bank won't hesitate to hike rates in consecutive meetings, too, he said.
He highlighted that the US job market needs to loosen further to bring inflation lower. Lagarde didn't sound much positive on the economic outlook of the Euro-zone though. Bank of Japan's Governor Ueda defended the ultra-accommodative stance of the Bank.
Federal Reserve Chairman Powell repeated his message of the possibility of two or more rate hikes in his speech at the fourth Conference on Financial Stability hosted by the Bank of Spain on June 29. The US Dollar was boosted by these hawkish comments from Jerome Powell. Another major development of the week was continuing weakness in the Chinese Yuan, which fell to a seven-month low against the US Dollar as it became the worst-performing Asian currency last month.
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