The Federal Reserve is an entity that generates interest in the financial market, especially with regard to its decision on interest rates. Investors are watching the two-day policy meeting from January 31 to February 1 to see if the rate will be determined.
In this article, we show you the opinions of analysts on the effects of the decision on gold, prices and demand.
Impact of the Fed’s decision on gold.
Gold fell slightly before the Fed decision. Han Tan, Chief Market Analyst at Exinity, argues that subsequent US economic growth could force the Fed to keep the rate rising, which could diminish gold’s gains since the start of the year.
Effect of inflation and the Chinese economy on the demand for gold.
The expectation of a slowdown in the Fed’s interest rate hikes came after economic data showed signs of rising inflation in the US. On the other hand, Clifford Bennett, chief economist at ACY Securities, says that as China’s economy continues to open up, there will be increased industrial and luxury demand for gold.
Ilya Spivak, global head of macroeconomics at Tastylive, comments that the Fed’s decision and subsequent Powell speech have the potential to affect gold prices.
The Fed’s decision on interest rates will have an impact on the gold market, both in its price and in its demand. Investors are watching the Fed’s policy meeting for more clarity on its rate-hike strategy.
Inflation and the Chinese economy will also influence the demand for gold. The Fed decision and Powell’s speech are events to be considered by those interested in the gold market.
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