Fed Raised Rates 0.25% – Rising Rates Positive For Gold
Fed Increases Rates 0.25% – Rising Interest Rates Positive For Gold
The Federal Reserve increased interest rates by 0.25% as expected yesterday leading to gold falling to lows last seen in February 2016 and the dollar rising to its highest level against the euro in 14 years.
Gold actually settled higher at $1,163.70 for the day yesterday. However gold futures slid to $1,156.70 an ounce in electronic trading on the rate decision at 1400 EST and soon gold was pushed down 1.3% to 10 month lows after the decision in less liquid after hour markets.
Source: New York Federal Reserve for Fed Funds Rate, LBMA.org.uk for Gold (PM fix)
Yellen announced a 0.25% increase in the benchmark rate to 0.50-0.75% as the Fed raised interest rates for the first time in a year.
The Fed signalled more rate hikes in 2017 as expected and once again attempted to appear hawkish and suggested they would increase interest rates three times in 2017.
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