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Long Term Picture For Precious Metals Sector Is Strongly Bullish

Published 05/20/2020, 08:55 AM
Updated 07/09/2023, 06:32 AM
XAU/USD
-1.26%
GC
-1.49%
GLD
-1.11%

Gold prices have surged to $1752 per ounce as Federal Reserve Chair Jerome Powell said that the U.S. central bank is committed to using its full range of tools to support the U.S. economy during the coronavirus pandemic.

“We are committed to using our full range of tools to support the economy in this challenging time even as we recognize that these actions are only a part of a broader public-sector response,” Powell said during his testimony before the Senate Banking Committee.

The Federal Reserve is also preparing to launch the Main Street Lending Program, which is designed to provide loans to small and medium-sized businesses that were in good financial standing before the pandemic as the virus has created tremendous strains in some essential financial markets and impaired the flow of credit in the economy.

The key takes away from today’s meeting by Chairman Powell and Treasury Secretary Stephen Mnuchin was that they are injecting a huge amount of money into the economy in order to prevent the economy from complete collapse however the impact of this unprecedented amount of money printing would be very long and severe even after the end of the coronavirus. The long term picture for the precious metal sector is strongly bullish.

The Federal Reserve printed more money in the past few months than in the last 100 years of existence. The coronavirus has changed the business landscape and economy forever and those who won't adapt will be left behind. We believe selected gold stocks and quality crypto-assets should be preferred in the investment portfolio.

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