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Opportunity coming in gold?
Published on 06.12.2016 21:33

The gold price is under further pressure today but some say an opportunity is in the making when the US Federal Reserve meets next week for their latest interest rate decision.

At 6.20pm (GMT) gold was trading at $1,168 down from $1,169 in yesterday’s trading.

The precious metal has suffered ever since Donald Trump won the presidential election catching investors of guard as some had predicted that the price would go as high as $1,400 on a Trump victory

 Speculation that the Fed will raise interest rates next week is usually negative for gold as it makes the US dollar more attractive as an interest bearing investment.

In fact the market is already forecasting a 100 percent chance that a rate hike is coming but many say it is already priced into the market and we may see gold have a knee jerk reaction and actually jump on the announcement,

“While it’s easy to put forward a bearish viewpoint leading into next week’s US Federal Open Market Committee (FOMC) meeting, considering an interest rate increase in effectively priced in, the risk looks to be ever increasing to the top-side,” MKS said. 

The material published in on this page is produced by the FIBO group companies, and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Andrew Masters

Analyst

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