Gold Continues To Stay At High Levels
Gold is a dollar-dominated commodity. The change in US dollar will dramatically affect the price of gold. On Wednesday, Gold continued to hold its high levels after an increase in the value of the US Dollar. Gold futures have reached their peak value in three weeks. The Federal Reserve’s December meeting has not affected the value of Gold much. Dollar slightly reduced after its 14-year high and it continued to stay at the reduce level.
The Federal officials held a meeting in December and discussed the possibility of rising interest rates. The officials have agreed that there is a need to increase the interest rates much faster than the anticipated pace. The Fed obtained unanimous voting to increase the federal funds range. This will be the second interest rate increase proposed in the last 10 years.
Increased interest rate is not a favorable condition for gold. Gold futures benefit from a looser monetary policy. Even with the promise of increased interest rates, the Dollar didn’t climb suddenly. This offered some support for gold. Gold was trading at $1165.30 per ounce just after the release of the Federal Reserve meeting minutes. Gold gained 0.3% despite the announcement from the Fed. It is one of the highest finishes for gold recorded since December 12th. Experts feel that gold prices will not head further down as the market is supported by huge short positions. A rebound in metal prices will not be surprising in the upcoming weeks.
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