All eyes are on the ECB and the potential rate of currency devaluation

0
47


Editor’s Note: With such market volatility, stay up to date with daily news! Take a minute to read our quick summary of today’s must-see news and expert advice. Register here! (Kitco News) – All eyes will now be watching the European Central Bank to see if it will do anything to push inflationary pressures up.
While further stimulus from the ECB would boost the US dollar and, in turn, lower gold prices, analysts said investors should look beyond this short-term volatility and focus on the big picture: a new turn in the global currency devaluation race.
Marc Chandler, chief market strategist at Bannockburn Global Forex, said technical indicators point to continued near-term consolidation. However, he doesn’t expect to see a significant correction.
“If the big central banks are engaged in an uncoordinated effort to convince investors that they are serious about pushing inflation up and that in part that means lower rates for longer, it is difficult to consider a deep or sustained drop in gold prices ”. he said.
Commerzbank commodities analysts said they also saw the potential for a rise in gold prices as the ECB could trigger a devaluation race.
Jonathan Butler, Precious Metals Analyst at Mitsubishi, said it’s no surprise that the government and central banks are focused on increasing inflationary pressures as they attempt to revive the global economy. Since March, the global economy has been disrupted by the COVID-19 pandemic.
“Governments and central banks around the world are looking, more than ever, to raise inflation as they seek a return to growth, are avoiding a deflationary trap and perhaps also inflating record levels of public debt incurred this year. year, ”he said. “Negative interest rates and a global pandemic / economic crisis have been the backdrop for gold’s strong support over the past few months. We expect the macroeconomic environment to continue to be favorable for gold as an investment. “

Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. This is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept guilt for any loss and / or damage resulting from the use of this publication.

Previous articleRussian Navalny comes out of coma after poisoning – BBC News Africa

LEAVE A REPLY

Please enter your comment!
Please enter your name here