Gold Price Wavers As USD Jumps Post-FOMC Hours Since FOMC Minutes noted that although yield curve ceilings, or target rates, may be used as a useful tool, it has also been suggested that the potential need for large amounts of additional federal government debt in certain circumstances may present significant risks to the credibility of the central bank, which is why some market participants are watching the USD/GBP and USD/JPY figures to see if the US government has sufficient fiscal space to support a rise in interest rates. Many believe that there are no immediate signs of a move in rates, but there is no telling when the United States will reach a tipping point.
Gold Price Wavers As USD Jumps After FOMC Minutes Although there were no obvious signs of change in the US economy in its first three economic quarters after FOMC hours, the Federal Reserve remained on a watchful stance. There is little doubt that as the Fed starts raising interest rates, more of the pressure will come from the financial markets. The only way to really determine whether or not a rise in rates will have a negative impact on the economy is to wait for a few months before making decisions about buying or selling gold.
Gold Prices Has Already Diving As the USD has already started to rise against the British pound following FOMC minutes, gold prices fell almost ten percent to hit their lowest point in history. Gold futures contract prices fell to a three-month low, while the spot price was also down. This is likely to continue the decline, with gold prices falling further in the weeks ahead.
Gold Futures Prices Is Falling because of the Global Financial Crisis As with all precious metals, there is a good chance that the United States will experience a significant slowdown in its economy. If there is less demand for gold and fewer buyers in the futures market, the price of gold will fall.
Gold Price Wavers Is Due to US Recession As stated before, there is also a chance that the US government will experience price hikes in response to its own economic problems. If this occurs, then gold prices may actually rise as the supply exceeds the demand. However, if the government’s problems are relatively minor, then the price of gold will remain at its current level for several months or years. So far, it is impossible to know if the United States will experience any significant changes in the market until the first quarter of 2020.
Global Recession Has Had Very Little Effect on Gold Demand As far as global recession is concerned, there is little doubt that the situation will remain volatile throughout this year. With the global economy slowing down and unemployment continuing to rise, there is likely to be less demand in the long run for gold and higher prices at some point.
Gold Price Wavers Due to the US Economy’s Inefficiency As a result of the US economy’s inefficiency, many people have lost confidence in the US dollar and may seek out alternative currencies that offer the same level of security. In fact, there is already a large amount of demand for other currencies, as traders try to make a quick buck by selling their US currency holdings for alternative currencies. So far, most traders have avoided gold, but in the coming days, many more may take advantage of this opportunity to purchase gold as they realize that the dollar will soon fall back and there is a greater chance of a fall in the price of the metal.
Gold Price Will Continue to Fall Although the global recession will affect the gold market in a number of ways, the US economy’s inability to recover is not expected to result in a major reduction in gold prices. However, the uncertainty associated with the future economy may cause a lot of investors to hold off buying gold until the market shows signs of recovery. In the meantime, if you are an investor in precious metals and you do not own gold now, then do so as soon as you can. Although gold has a lot of promise in the future, do not let the uncertainty keep you from investing