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Federal Reserve chairman Jerome Powell said last week that the central bank will continue to act “forcefully, proactively and aggressively” to sustain the economy, and plans to keep rates near zero until 2022.
The Fed’s dovish stance will be bullish for gold in the long-term, said Frank Holmes, CEO of U.S. Global Investors, who noted that a trillions more dollars will likely be printed before we see a full economic recovery.
“Powell is making these very strong statements so that means they’re going to print, and I think you’re going to see another couple of trillion dollars in the summer. I’ve said this from day one, I think it’s going to take $10 trillion in the U.S. alone and that’s forgetting what Europe is spending, they’re also on a huge binge of spending. Japan and China, and this is what makes gold a super attractive asset,” Holmes told Kitco News.
On risk assets, Holmes said that although near-term volatility is expected, the longer-term trend is still up.
“The President is focused on the stock market, and I think that’s what’s really important,” he said.
