Gold Investment 'to benefit' if Fed postpones rate hikes
Calyon analyst Robin Calyon has claimed today (June 24th) that Gold Investment could be boosted if the US Federal Reserve decides to hold off on raising interest rates, Reuters reports.
The Fed met on Wednesday to discuss its next move in response to the global economic downturn, with a possible interest rate increase thought to be on the cards.
However, Mr. Bhar has explained that investors are now not so sure about when it will take action and that the uncertainty could lead to more people deciding to Buy Gold.
He told the news provider: "There was a feeling that the Fed would have to tighten [rates] a lot sooner, but investors are perhaps reassessing their view of the timing of rate increases. And that, of course, would help gold."
Higher interest rates - and therefore borrowing costs - in the US tend to boost the dollar, therefore adding pressure to gold due to its inverse relationship with the yellow metal.
Those comments come after Darren Heathcote, head of trading at Investec Australia, predicted that the economy will continue to recover, boosting inflation and thus gold prices.
"I think ultimately, unless we see some kind of negative fallout again from the financial sector, the hopes are good for a continued recovery in metal prices and gold to benefit further," he said in an interview with Reuters.
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