This morning in metals news: the gold price continues to slide; the Federal Reserve released its latest Monetary Policy Report; and the record freeze in Texas is disrupting natural gas production.
Gold price weakens
After surging to around $2,035 per ounce in August, the gold price for the most part trended in a band between $1,850-$1,950 through the balance of 2020.
Of late, however, the gold price has retraced, even falling below the $1,800 threshold.
Gold closed Thursday at $1,775 per ounce.
The gold price has fallen, even as the US dollar has also continued to lag. The US dollar index reached 90.23 today, compared with just over 99 a year ago.
One thing worth monitoring is growing interest in cryptocurrencies, particularly Bitcoin. The cryptocurrency has surged above the $53,000 mark and jumped by approximately 80% this year.
Amid a run of loose monetary policy from central banks around the world, some investors will look to other assets. That could mean they’ll even look to assets other than time-tested safe havens, like gold.
It’s unlikely that the US dollar will lose its status as the global reserve currency anytime soon. However, cryptocurrencies like Bitcoin could potentially weigh on gold, leading some investors to rethink traditional safe-haven asset strategy.
A lot can change in a year. In February 2020, Bitcoin hovered around just under $10,000.
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Fed releases Monetary Policy Report
Speaking of currency, the gold price and monetary policy, the Federal Reserve today released its latest Monetary Policy Report.
The report notes the labor market recovered as the year progressed. However, the pace of the recovery slowed down significantly late in 2020.