Shares for gold miners Newcrest Mining Ltd [ASX:NCM], Evolution Mining Ltd [ASX:EVN] and ST Barbara Ltd [ASX:SBM] were all up today at time of writing, as the gold price increased overnight.
Why did the Gold Price Rise?
Gold prices rose slightly as US President, Donald Trump elected Jerome Powell as US Federal Reserve chair. As long as the US Senate confirms his appointment, he will be replacing Janet Yellen next February.
Powell is currently a governor at the US Federal Reserve and has been since 2012. During the announcement of his appointment in the Rose Garden, he didn’t give much indication of where he will be taking economic policy.
What Now for Gold Price?
Powell is considered a centrist and will most likely take a dovish approach on the Fed’s future economic policies.
He has voted for every policy decision in accordance with Janet Yellen since joining the Fed.
He agreed on the four times the Fed increased interest rates since 2009 and with the decision to unwind the Fed’s massive balance sheet.
Since the 2008 financial crisis, the Fed embarked on a bond buying program that increased its assets to US$4.5 trillion. Unwinding this massive balance sheet could very well trigger a crises…
Analyst, For Markets & Money