The U.S. dollar closed slightly lower on Wednesday after a volatile session as dovish testimony from Federal Reserve Chairman Jerome Powell bolstered concerns about rising inflation.
Fed Chairman Jerome Powell reiterated on Wednesday that U.S. interest rates would remain low and that the central bank would continue to buy bonds to support the U.S. economy. The Fed’s commitment to low interest rates has some investors worried that inflation could surge as further fiscal stimulus is passed.
Mr. Powell’s remarks before the House Financial Services Committee echoed his testimony in the Senate on Tuesday.
The opportunity for faster growth, helped by easy financial conditions and the promise of fiscal stimulus, has led to flows to currencies that stand to benefit from the recovery in global trade, such as commodity-linked currencies, and to countries such as the UK recovering from the coronavirus pandemic.
In the session, the dollar index briefly rose nearly 40 points to a fresh session high of 90.43, but it quickly fell off its high and was last at 90.03, down 0.10%, hitting a session low of 89.99.
Spot gold moved in the opposite direction from the dollar, jumping above $1,800 shortly after plunging nearly $30 to hit a low of $1,783.42 an ounce, but still ending the day down. Spot gold settled at $1805.34 an ounce, down $0.24, or 0.01%
Jim Wycoff, senior market analyst at Kitco, noted that rising government bond yields were negative for the precious metals market in the middle of the week, with benchmark US Treasury yields currently at 1.4%, a one-year high. The bulls are also struggling from a technical perspective, with gold in a downtrend on the daily chart. However, this week’s volatility in US equities, weakness in the dollar index and a rebound in crude oil prices, which hit a 13-month high on Tuesday, should support the gold and silver market.
The heart-stopping decline in U.S. stocks has finally come to a temporary end, with the three major indexes quickly reversing early losses and moving higher.
The Dow closed up 424.50 points, or 1.35%, at 31961.86, breaking the 32,000 level for the first time in the session. The S&P 500 rose 44.10 points, or 1.14 percent, to 3,925.43. The Nasdaq closed up 132.80 points, or 0.99 percent, at 13,597.97.
GME.N) shares surged 70 percent after triggering an intraday trading halt, quickly extending gains to 100 percent to close at $91.71 when trading resumed. Its after-hours gains extended as much as 100 percent to $153.02.
Earlier, Game Station announced that Chief Financial Officer Jim Bell would be stepping down, effective next month. The board and management pushed Bell to step down to make way for a new CFO with a plan to transform Game Station from a brick-and-mortar retailer into an e-commerce company, according to people familiar with the matter.
The news sparked a flurry of discussion on Reddit, prompting speculators to buy up Game Station shares and send the stock soaring.
Wissink, an analyst at Jefferies, said the move was spurred by talks between RC Ventures, a hedge fund, and the company. Hedge fund RC Ventures, which owns 9.9 percent of Game Station, has said it wants to get more involved in the business.
In addition to Game Station, other retail groups rose as a group: Gauss Electronics up more than 60 percent, Express up more than 44 percent, and AMC Theatres up 26 percent; Naked Brand Group is up nearly 20%, while BlackBerry is up more than 6%.
The move came after Charlie Munger, Berkshire’s vice-chairman, slammed brokers for luring gamblers and creating a trading frenzy, calling it a dirty way to make money.
In other news, Republican Senator Mitt Romney of Utah, the Republican Party’s 2012 presidential candidate, said in an interview on February 23 that Donald Trump would probably win the Republican nomination for president if he decided to run for president in 2024. But he will not vote for Mr. Trump. He added that Mr. Trump has by far the biggest voice and influence in the Republican Party and that he expects Mr. Trump to continue to play a role in the party. Mr. Romney is understood to be the only Republican to vote for Mr. Trump in both of his impeachment trials.