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The US Federal Reserve’s (Fed) balance sheet continues to expand with the central bank running an open-ended asset purchase program to ensure the smooth functioning of credit markets, which had come under stress during the height of the coronavirus crisis in mid-March. 

The balance sheet has risen to a new record high of $7.03 trillion this week, according to data provided by the Federal Reserve Bank of St. Louis.

The balance sheet has expanded by $3 trillion over the past 2.5-months. 

Analysts at JP Morgan and Goldman Sachs think the bond market will face demand shortage and the Fed and other central banks would have to step up purchases to keep yields depressed. Put simply, the Fed’s unprecedented balance sheet expansion is likely to continue. 

Analysts expect the Fed’s frantic pace of asset accumulation to bode well for gold. The yellow metal has gained over 10% so far this year.