Gold (XAU/USD-spot) made a 1-week high around 1751.62 on more dovish hold by Fed as FOMC dot-plots indicate no rate hikes at least till 2022; no QE tapering in 2021. The Fed is also still open about the SLR exemption extension beyond Mar for another year and a decision would be taken in the next few days. As the U.S. is expecting to achieve herd immunity (COVID) by H1-2022, the Fed may indicate gradual QE tapering from Dec’22 and rate hikes from Dec’23. But the market was expecting gradual QE tapering from as early as Dec’21 and rate hikes from Dec’22. Subsequently, US bond yield eased from a 13-month high around +1.687% to +1.637% and Gold as-well-as Dow, Nasdaq, SPX-500 jumped. But the overall optimism was quite limited as Fed Chair Powell also downplayed the significance of long-term dot-plots (beyond 1-year) as it’s a mere averaging of individual views of each FOMC policymakers. Also, Powell kept the SLR suspense open. Powell clarified any plan of gradual QE tapering and rate hikes will depend upon the Fed’s assessment of maximum employment under the evolving economic situation and core PCE inflation is sustainable above +2.00%. Overall, Powell was quite upbeat about GDP growth in 2021 but downplayed any higher inflation as merely transitory. Earlier Tuesday, Gold was also boosted by reports of adverse side effects of Astra COVID vaccine, and suspension of the same in various European countries. There were reports of adverse side effects (blood clots in the brain) in some persons in Europe after inoculating with the Oxford-Astra COVID vaccine, leading to the suspension of the same in many countries. But Gold slips after the WHO said there is no scientific proof of a correlation between such blood clots and the Astra vaccine. The potential benefit of the Astra COVID vaccine is far higher than the risk. If the bond yield goes higher, Gold will be under stress as it does not provide any dividend/interest (yield). The U.S. bond yields are also getting a boost from a potentially higher supply to fund CARES Act 3.0 for $1.9T and a likely huge infra stimulus for $2.50-4.00T over the next 5-10 years. Although Biden is also planning for some tax hikes to fund a portion of the infra stimulus, still the U.S. may have to pay around 15-18% of its revenue as debt interest, which is substantially high, although still manageable. Biden is also ready to eliminate the decade-old tradition of Senate filibuster rule On Wednesday, US10Y bond yield made a 13-month high (since Feb’20; pre-COVID) around +1.687%, and subsequently Gold slips to the early U.S. session low around 1724.28; earlier it made a European session high around 1737.93. The US10Y bond yield may be around +2.00/2.50% levels in the coming days (pre-COVID levels) on the progress of COVID vaccinations (herd immunity), reopening/normalization of the economy. In that scenario, Gold may hover around $1500-1300 levels (pre-COVID).