(Kitko News) – All eyes will now be looking at the European Central Bank to see if they will do anything to increase inflationary pressures further.
Although the ECB’s new stimulus measures will boost the US dollar and, in turn, gold prices to fall, analysts have said investors should look at this short-term volatility and focus on the bigger picture: a new run in the global race Lap currency devaluation.
Mark Chandler, chief market strategist at Bannockburn Global Forex, said technical indicators point to continued consolidation in the near term. However, he does not expect to see any significant improvement.
“If major central banks are engaged in an unlawful attempt to convince investors that they are serious about pushing inflation to a higher level and this, in part, means that gold prices, in the long run, at lower rates It is difficult to imagine a deep or sustained decline, ”she said.
Commerzbank commodity analysts said they also see potential for higher gold prices as the ECB could promote a devaluation race.
Mitsubishi’s precious metals analyst Jonathan Butler said the government and central banks have not focused on increasing inflationary pressures as they are trying to redefine the global economy. Since March, the global economy has been averted for the COVID-19 epidemic.
He added, “Governments and central banks around the world are raising inflation more than ever before, as they seek a return to growth, avoid the trap of deflation, and perhaps even raise record levels of government debt this year Huh.” “The negative interest rate and a global epidemic / economic crisis were the backdrop for a solid gold base for the past several months. We expect the macro environment to remain gold-friendly as an investment. “
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