The gold price is continuing to hold near the $1,800 per ounce barrier of recent weeks, as markets remain unmoved by last night’s Federal Reserve monetary policy meeting, and the unveiling of the next spending plan from President Biden.

Gold has been trading in a fairly tight range of around $30 for the past two weeks as it approaches $1,800 per ounce for the first time in just over two months. Climbing as high as $1,798.24 last week, $1,800 per ounce is proving a new psychological barrier for the precious metal, with resistance coming each time it nears that level.

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Analysts expect that if gold can break through $1,800 it could signal a new rally for the metal as momentum builds, but for now at least it has proved a difficult point of resistance to push past.

As expected, the Federal Reserve’s latest policy meeting resulted in no change, with interest rates left at historic lows. Chairman Jerome Powell maintained that the recovery is still in progress and that “it’s not time to start talking about tapering.” The US economy has been showing signs of recovery following a successful start to its vaccine campaign, with March’s job growth report coming in ahead of expectations. Powell was quick to confirm however that this would not be enough to see bond buying programs reigned in. “We had one great jobs report. It is not enough to start talking about tapering. We'll need to see more data.”

On the key issue of inflation, Powell stuck to his guns that any inflation is likely to be “transitory” and will not be sustained long term at unmanageable levels. Current price rises have so far been blamed on supply bottlenecks and pent-up demand, but with trillions of new Dollars being pumped into the economy many analysts feel official inflation numbers are already far lower than real world prices, and inflation could still be a bigger problem than the Fed has suggested.

In what was a big day for US financial news, President Biden announced the long-rumoured next steps in his social public spending plans. Presented in two stages – the American Jobs Plan and the American Families Plan – the announcement would see a host of new measures introduced to the US welfare system, as well as a continuation of tax breaks introduced during the pandemic.

The plans would total $4 trillion in further spending, and the Democrat President has vowed this will be funded by corporations and the wealthiest 1% of Americans. Raises to corporation tax and capital gains tax in the US have already been suggested and saw stock markets pull back on the potential implications of such measures.

With the Democrat majority slim in both houses however, the plans will likely face opposition from the Republican Party, and from moderate Democrats. Measures could be watered down or outright removed before passing into legislation, and markets so far have also shrugged off the proposals, for now preferring to focus on a number of big companies announcing strong earnings reports.

A slight pullback in the gold and silver price has been amplified here in the UK thanks to a weaker Dollar and stronger Pound, which rose a cent against the Dollar following yesterday’s announcements.

As suggested by many analysts, the first half of 2021 is largely being dominated by optimism over the end of lockdowns that will allow economies to begin recovering. The gold market is waiting for further signs of growing inflation, and could begin to make further gains as more figures come in the latter half of the year.