Question: Why Is Gold Reaching Its Peak While The Economy Is Doing Well
ViVA POST – In the last few days we have seen that the price of gold has soared very high and has even broken an all-time high record in the area of $3,055 per ounce where the price has never been printed by precious metals.
The Federal Reserve in its FOMC meeting yesterday emphasized that they remain optimistic and confident that the United States’ economic growth will remain strong and continue to increase even though we all know that the tariffs imposed by President Trump have created new problems for the world and international trade. The ‘hawkish’ and confident statement of Mr. Jerome Powell as chairman indicates that we must remain optimistic and continue to work hard so that state revenues and deficits must be addressed immediately.
The level of consumer confidence has declined in recent times, becoming a wake-up call for stakeholders to think hard about how to keep economic growth on the right track.
Since last week, U.S. President Donald Trump has increased import duties on steel and aluminum to 25%. He also intends to impose new sectoral and reciprocal tariffs beginning on April 2.
Gold has increased by more than 15% this year, making it a hedge asset against inflation and economic uncertainty.
Prior to the announcement, traders had a 57% chance that the Fed will begin lowering interest rates at its June meeting; nevertheless, Fed fund futures showed a 66% possibility. Traders and investors should be more careful if they want to buy gold because the price is already too expensive, the tendency for correction is very likely to occur. Moreover, investor demand for gold instruments in China and India is not good due to the weakening purchasing power of the community, in technical analysis shows that stochastic and RSI are quite high above level 80.
The information here does not constitute a suggestion to buy or sell any particular asset, your own discretion as a trader is strongly advised.