Gold Futures Rally Despite Strong US Economy and Fed Bank Head Optimism: What Does This Mean for Central Banks?

Despite the strong US dollar and 10-year treasuries yield, gold futures continue to rally. Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, expressed optimism about the strong fundamentals of the US economy in his statement today. He noted evidence of some softening around the edges of the economy and highlighted the disinflation despite remarkable economic growth.

Kashkari mentioned that the interest rate outlook depends on the path of the economy and suggested that wage growth might still be a bit too high to reach 2% at the moment. It may take a year or two to get inflation back to 2%, according to Kashkari, who also acknowledged the challenges posed by the economy continually throwing curveballs.

In terms of Central Bank Digital Currency (CBDC), Kashkari doesn’t see its value. Meanwhile, gold continues to rally despite the strong US dollar, and silver has seen a 2.8% gain today, reaching its highest levels since the past 14 days and climbing above the $30 zone.