World gold prices rebounded from lows in the trading session after US Federal Reserve (Fed) Chairman Jerome Powell issued a cautious signal on monetary policy, while emphasizing the importance of the independence of central banks.
In his last press conference as Fed head, Mr. Powell said that the agency is not in a hurry to change its policy stance in the context of a still volatile global economy.
We are in a position to adjust in both directions. Currently, no one is calling for an increase in interest rates. All decisions will depend on the actual developments," he said.
According to Mr. Powell, the current interest rate of around 3.5% has approached the "neutral" zone - i.e., neither stimulating nor restrained the economy. He emphasized that the reasonable interest rate range according to personal assessment is in the 3-4% range.
However, the gold market did not record too strong fluctuations after this statement. Spot gold was traded around the threshold of 4,538.2 USD/ounce, down about 1.2% compared to the beginning of the session.
Analysts believe that although expectations of interest rate cuts this year have weakened, gold is still well supported as the possibility of the Fed raising interest rates again is not high.
In addition, geopolitical tensions, especially conflicts between the US and Iran, have caused supply shocks in the oil market, pushing energy prices up. However, Mr. Powell said long-term inflation expectations are still hovering around the target level of 2%.
Notably, although this is the last press conference as Fed Chairman, Mr. Powell said he will continue to stay in the Board of Governors until he believes that the Fed's independence is guaranteed.
What I am concerned about is that legal attacks on the Fed, which may affect the ability to manage monetary policy without political pressure," he said.
Many experts believe that concerns about political intervention have contributed to strengthening the role of gold as a neutral monetary asset.
In that context, investors are concerned that the Fed may be forced to loosen its policy excessively, increasing inflationary pressure - a factor that often supports gold prices.
Despite admitting that the Fed is facing pressure, Mr. Powell affirmed that the agency will remain steadfast in its dual goal, making decisions based on data analysis rather than political factors.
I believe that the Fed will continue to act based on rigorous analysis, not influenced by politics. But clearly, we have struggled to protect that," he emphasized.
