(Bloomberg) Just when the vaccine rollout and economic optimism left gold looking like last year’s metal, it staged a recovery.Bullion is one of the best-performing commodities this month, erasing almost all of this year’s losses. Investors have been lured back by gold’s appeal as an inflation hedge, while the Federal Reserves maintains its monetary stimulus and says price pressures should prove temporary.Diego Parrilla, who runs the Quadriga Igneo fund, is among those who recently boosted their exposure to gold, saying that central banks won’t risk increasing interest rates to combat inflation for fear of “pricking the enormous bubbles” they’ve created.“We have entered a new paradigm that will be dominated by deeply negative real interest rates, high inflation, and low nominal rates an extremely supportive environment for gold,” said Parrilla, who manages $350 million.Still, gold is ultimately a haven asset which conve
Read more about Four key charts to indicate whether latest rally in gold can be sustained on Business Standard. Bullion is one of the best-performing commodities this month, erasing almost all of this year s losses.
Rupee may rise after a blip
BL Research Bureau
Riding on a weak dollar (USD), the rupee (INR) appreciated in the past week and on Wednesday, it closed at 73.42. Thus, the year-to-date loss of INR against USD now stands at about half a percent. While foreign inflows worked out for the local currency, persisting weakness in dollar also helped rupee fare better against the greenback. Last session, inflation data were released in India and the US and this can have an impact on the exchange rate of USDINR. Let us take a look at the latest numbers and its impact on the exchange rate.
While much of Wall Street is ringing alarms about out-of-control inflation, Federal Reserve Chair Jerome Powell and his colleagues are expressing confidence in a more benign outlook.
Acceleration in U.S. price growth this year will have “only transitory effects on underlying inflation,” Fed Vice Chair Richard Clarida said Wednesday, playing down news released earlier that consumer prices climbed in April by the most since 2009.
Governor Lael Brainard said the day before that officials should be “patient though the transitory surge.” Both echoed Powell, who has repeatedly stressed the temporary nature of an anticipated increase in price pressures.
While policy makers expect the Fed’s preferred measure of inflation to rise to around 2.4 per cent this year as the economy reopens and the pandemic recedes, they forecast it to return to their 2 per cent goal for 2022.
Akhil Nallamuthu
BL Research Bureau |
Updated on
April 29, 2021
Rupee could touch 73.50 in the near term
As the dollar (USD) declined, the rupee (INR) made considerable gains over the past week. The weakness in the greenback could persist and so, the local currency could retain the positive bias in the short term. The year-to-date loss of INR against USD recovered over the past few sessions and it now stands at nearly 1.4 per cent.
Fed retains stance
The Federal Open Market Committee (FOMC) of the Federal Reserves of the US released statement yesterday which says the committee has decided to keep the benchmark rate unchanged and continue with $120 billion bond buying programme. However, the committee noted that the economic activity has improved and employment has strengthened amid progress in vaccination. Nevertheless, they also said the risks remain and so the policy will remain accommodative the likelihood of tapering the asset purchase anytime soon looks low. This led to