Gold News

Fed decision could boost Gold Investment

The resolve of the US Federal Reserve to keep interest rates near zero could lead to increased Gold Investment.

In a unanimous move, the US central bank decided to keep interest rates at the record low range of zero to 0.25 percent at its latest meeting, and also intimated that they could be kept at this level for some time to come.

A statement released by the Fed said that it "continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period".

According to an Investec Bank (Australia) report seen by Reuters, this could push up the Gold Price as investors buy into the commodity in order to protect themselves from inflation.

Analysts at the bank wrote: "Gold Prices were bolstered by the U.S. Federal Reserve when at the FOMC meeting it signaled its strong resolve to keep interest rates at near zero, thereby enhancing bullion's status as a hedge against inflation," the news provider revealed.

The decline of the dollar, which traditionally has an inverse relationship with gold, could also serve to boost the yellow metal's appeal, with AngloGold Ashanti recently revising its Gold Price expectation on the back of dollar weakness.

"We think it could trade a lot closer to $1,000 next year and it will very much depend on how weak the US currency trades. I think it will be weaker, the real question is how much weaker," chief executive officer Mark Cutifani commented.

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