Gold tumbles as rates set to increase
Published on 23.11.2016 18:48

The gold price has taken a hit in the American session today after strong data out of the US boosted the greenback and increased the chances next month of a rate hike from the US federal reserve.

Gold was trading at $1,288 at 4.36pm (GMT) down over $20 from yesterday’s close.

The catalyst for the fall was the release of the durable goods numbers from the |US which hit the market at 4.8 percent which was well above expectations for a figure of 1.5 percent and shows the US economy is powering ahead.

The news has the market now pricing in a 100 percent chance that the Fed will raise rates in at their next board meeting in September.

"It's been a pretty dreadful time for gold, everything that's good for growth has been negative for gold ," said Robin Bhar, head of metals research at Societe Generale in London.

Mr Bhar also noted that things are not all bad, and as we get closer to next month’s rate decision there may be opportunity to take a long position in gold.

"I suspect that maybe 70 percent of the rate rise is priced into the market, and when it comes through, you may have 'sell the rumor and buy the fact'," he 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


The world of trading has no boundaries

Risk warning: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, your level of experience and preparation of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.

Important notice
By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.