GOLD PRICE, GOLD FORECAST & GOLD NEWS: FED QE PROGRAM TO BOOST BULLION
- Gold price[1] action looks primed to resume its near-vertical climb as liquidity is restored
- Gold exploded over 3% in response to ‘extensive new measures’ from the Fed
- Gold could rise with the FOMC[2] able to purchase an unlimited amount US Treasuries
After the recent stock market rout pressured gold[3] more than 10% lower, the precious metal might be set to resume its parabolic ascent. Gold is on pace for its biggest intraday gain since June 2016 as spot prices soar over 3.5% while virus-induced recession fears swell[4].
GOLD PRICE CHART: 5-MINUTE TIME FRAME (23 MARCH 2020 INTRADAY)
Gold price action started to skyrocket this morning after mind-boggling news from the Federal Reserve[5] crossed the wires. The US central bank, or Fed, detailed extensivenew monetary policy tools in aims of countering the worrisome spike in recession risk[6] largely attributed to economic fallout from the coronavirus pandemic.
Specifically, the Fed revealed unprecedented measures that allows the FOMC to purchase US Treasuries and agency mortgage-backed securities “in the amounts needed.” With the Federal Reserve announcing unlimited QE[7], the Fed balance sheet is likely set to explode, which reinforces the thesis that gold could soon near record highs[8].
GOLD PRICE CHART: DAILY TIME FRAME (AUGUST 2019 TO MARCH 2020)
Chart created by @RichDvorakFX[9] with TradingView[10]
Spot gold (XAU/USD[11]) has rebounded by 7.5% since the March 16 swing low around the $1,460/oz price. In addition to technical support provided by the November and December 2019 lows, this level roughly aligns with the 200-day simple moving average
