Gold advances as Fed cools over future rate hike
By Duncan Richardson, News Editor
28 Jan 2016
The gold price rose sharply yesterday after the Federal Reserve said they are “closely monitoring” the global economy and how a downturn will impact the U.S.
Following their two day meeting The Federal Open Market Committee decided to keep U.S. interest rates unchanged, although they reaffirmed their intention to raise interests later this year.
In the face of a slowing economy, investors are increasing their bets the Federal Reserve will not be able to raise rates as fast as previously expected. The change in sentiment is boosting the gold price and traders are increasing their exposure to exchange traded funds.
Many in the gold community believe the recent stock market decline is the first sign we are entering into a global recession and rather than raising rates, the Fed will be forced to take rates negative and commence QE4.