{"id":42279,"date":"2023-11-05T04:30:58","date_gmt":"2023-11-05T04:30:58","guid":{"rendered":"https:\/\/innodebt.com\/investing\/why-the-feds-decision-to-hold-rates-steady-could-lift-gold-back-above-2000\/"},"modified":"2023-11-05T04:31:00","modified_gmt":"2023-11-05T04:31:00","slug":"why-the-feds-decision-to-hold-rates-steady-could-lift-gold-back-above-2000","status":"publish","type":"post","link":"https:\/\/innodebt.com\/?p=42279","title":{"rendered":"Why the Fed\u2019s decision to hold rates steady could lift gold back above $2,000"},"content":{"rendered":"

Gold has more reasons to rise in the wake of the Federal Reserve\u2019s decision in November to stand pat on interest rates, helping to make a price climb back above $2,000 an ounce a real possibility in the last few weeks of the year.<\/p>\n

On Wednesday, the U.S. central bank left its key interest rate at a 22-year high, in the range of 5.25% to 5.5% and said it would take into account a wide array of data to decide whether it will need to raise rates again to \u201creturn inflation to 2% over time.\u201d <\/p>\n

\n

Economists said comments from Fed Chairman Jerome Powell in a post-decision press conference left open the option for the central bank to end the current rate-hike cycle. \u00a0<\/p>\n

Read:<\/strong> Powell adds fuel to the talk that the Fed is done hiking rates<\/p>\n

The Fed decision had been widely expected, so gold prices \u201chave not risen as high as in some other areas of the market,\u201d but they are \u201cat or very near record highs in pretty much every other major currency,\u201d other than the U.S. dollar, said Will Rhind, chief executive officer and founder of GraniteShares, which runs the GraniteShares Gold Trust
\n BAR.<\/span>\n <\/p>\n

Fed decision\u2019s impact<\/h2>\n

The Federal Open Market Committee\u2019s decision to keep rates steady is positive for the gold market as Treasury yields and, more important, the U.S. dollar have declined as a result, Rhind told MarketWatch.<\/p>\n

Weakness in the dollar tends to decrease the opportunity costs for investors considering dollar-priced gold as an option versus other perceived havens. Lower yields, meanwhile, tend to raise the prospects for gold against government bonds.<\/p>\n

On Thursday, the yield on the 10-year Treasury
\n BX:TMUBMUSD10Y
\n was at 4.695%, down from 4.790% on Wednesday. The ICE U.S. Dollar index
\n DXY
\n fell by 0.6% to 106.221. <\/p>\n

\u201cThere are probably more reasons to be bullish on gold now than bearish,\u201d Rhind said. \u201cPrices could indeed hit $2,000 before year-end.\u201d<\/p>\n

Earlier this year, gold futures on May 4 saw its most-active contract trade as high as $2,085.40 an ounce on Comex and settle as high as $2,055.70, according to Dow Jones Market Data. <\/p>\n

On Thursday, gold for December delivery
\n GC00,
\n +0.04%<\/bg-quote><\/p>\n

GCZ23,
\n +0.04%<\/bg-quote>
\n settled at $1,993.50 an ounce, up $6, or 0.3%.<\/p>\n

While the Fed will \u201cremain data dependent, there were no overt signals\u201d for its policy decision in December, said Peter Grant, vice president and senior metals strategist at Zaner Metals.<\/p>\n

With inflation still well above the 2% target and the economy showing remarkable resilience, Grant told MarketWatch that the \u201cthe higher-for-longer mantra remains very much in place.\u201d<\/p>\n

He believes \u201cstrong U.S. yields should help underpin the dollar, and provide at least somewhat of a headwind for gold.\u201d<\/p>\n

Rhind, however, sees a fall in the U.S. dollar as the \u201cbiggest catalyst\u201d for gold potentially moving higher.<\/p>\n

A fall in the dollar could come \u201cby way of a significant negative investor reaction to the record levels of debt and deficit spending from the U.S. government,\u201d said Rhind. \u201cIf investors lose confidence in the dollar, they will look for alternatives and gold has historically always been one of the best hedges against the dollar.\u201d<\/p>\n

Global central bank demand<\/h2>\n

Robust gold demand from central banks also has made a big impact on the market.<\/p>\n

\u201cStrong net purchases of gold for official reserves by primarily emerging market central banks have been a feature of the gold market for more than 13 years now,\u201d said George Milling-Stanley, chief gold strategist at State Street Global Advisors. That looks to be \u201cuseful support for gold prices for the foreseeable future.\u201d<\/p>\n

Gold purchases by global central banks reached a record for the first nine months of this year, at 800,000 metric tons, according to the World Gold Council. Central bank purchases of gold had reached a record in 2022, with the full-year total at 1,136 metric tons.<\/p>\n

Last year, central bank buying received \u201cadded impetus from the decision of the U.S. government to \u2018weaponize\u2019 the international payments system, as some commentators have called it,\u201d said Milling-Stanley. \u201cThat helped to push net central bank buying to the highest levels we have ever seen.\u201d <\/p>\n

He expects to see continued strength in gold purchases among central banks this year.<\/p>\n

Wartime boost<\/h2>\n

The start of war in the Middle East between Israel and Hamas has contributed to the rise in gold, with prices for the precious metal posting a gain of nearly 7% in October after posting two consecutive monthly losses.<\/p>\n

\u201cGold prices will be driven more by the conflict in the Middle East rather than FOMC policy,\u201d Chris Gaffney, president of World Markets at EverBank, told MarketWatch.\u00a0\u201cThe Fed may or may not be at \u2018peak rates\u2019 but interest rates are certainly near the top, so focus for precious metals investors has now shifted to geopolitical concerns.\u201d<\/p>\n

On Thursday, Israeli troops advanced toward Gaza City even as U.S. and Arab mediators continued to push for a cease fire. <\/p>\n

\u201cGeopolitical risks remain high and the in the case of the Middle East, the risk of escalation is omnipresent,\u201d said GraniteShares\u2019 Rhind. At the same time, the war in Ukraine, which began early last year, \u201ccontinues to rage, and there are risks of further escalation that cannot be ignored.\u201d<\/p>\n

Pullback potential<\/h2>\n

Indeed, gold prices have seen an impressive rally following the Hamas attack on Israel.<\/p>\n

Recent gains have \u201creturned considerable credence to the long-term uptrend\u201d for gold, said Grant, adding that he considers a retest of the $2,067, $2,070.63, and $2,075.28 levels to be \u201clikely at this point.\u201d<\/p>\n

The all-time intraday high for most-active gold futures stands at $2,089.20 from Aug. 7, 2020.<\/p>\n

The $2,000 mark is an \u201cimportant psychological level\u201d for gold, and breaching through that will set the market up for a longer rally, with $2,500 \u201cpossible in the next couple of years,\u201d said EverBank\u2019s Gaffney. <\/p>\n

Still, given the \u201csteepness\u201d of gold\u2019s rally, Grant said gold is \u201cvulnerable to short-term corrective setbacks, particularly if the war in Gaza stagnates.\u201d<\/p>\n

Incoming economic data that raises the prospects of a December rate hike, including an especially strong U.S. jobs report on Friday, \u201ccould add to corrective pressures\u201d on gold, he said.<\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Gold has more reasons to rise in the wake of the Federal Reserve\u2019s decision in November to stand pat on interest rates, helping to make a price climb back above $2,000 an ounce a real possibility in the last few weeks of the year. On Wednesday, the U.S. central bank left its key interest rate […]<\/p>\n","protected":false},"author":1,"featured_media":42280,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[32],"tags":[],"class_list":{"0":"post-42279","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"yoast_head":"\nWhy the Fed\u2019s decision to hold rates steady could lift gold back above $2,000 | Innodebt<\/title>\n<meta name=\"description\" content=\"Gold has more reasons to rise in the wake of the Federal Reserve\u2019s decision in November to stand pat on interest rates, helping to make a price climb back\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/innodebt.com\/?p=42279\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why the Fed\u2019s decision to hold rates steady could lift gold back above $2,000 | Innodebt\" \/>\n<meta property=\"og:description\" content=\"Gold has more reasons to rise in the wake of the Federal Reserve\u2019s decision in November to stand pat on interest rates, helping to make a price climb back\" \/>\n<meta property=\"og:url\" content=\"https:\/\/innodebt.com\/?p=42279\" \/>\n<meta property=\"og:site_name\" content=\"Innodebt\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-05T04:30:58+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-05T04:31:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/innodebt.com\/wp-content\/uploads\/2023\/11\/1699158659_social.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"640\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/innodebt.com\/?p=42279#article\",\"isPartOf\":{\"@id\":\"https:\/\/innodebt.com\/?p=42279\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/innodebt.com\/#\/schema\/person\/742362d9a293429cc45829acf21919b4\"},\"headline\":\"Why the Fed\u2019s decision to hold rates steady could lift gold back above $2,000\",\"datePublished\":\"2023-11-05T04:30:58+00:00\",\"dateModified\":\"2023-11-05T04:31:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/innodebt.com\/?p=42279\"},\"wordCount\":1022,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/innodebt.com\/#organization\"},\"articleSection\":[\"Investing\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/innodebt.com\/?p=42279#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/innodebt.com\/?p=42279\",\"url\":\"https:\/\/innodebt.com\/?p=42279\",\"name\":\"Why the Fed\u2019s decision to hold rates steady could lift gold back above $2,000 | Innodebt\",\"isPartOf\":{\"@id\":\"https:\/\/innodebt.com\/#website\"},\"datePublished\":\"2023-11-05T04:30:58+00:00\",\"dateModified\":\"2023-11-05T04:31:00+00:00\",\"description\":\"Gold has more reasons to rise in the wake of the Federal Reserve\u2019s decision in November to stand pat on interest rates, helping to make a price climb back\",\"breadcrumb\":{\"@id\":\"https:\/\/innodebt.com\/?p=42279#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/innodebt.com\/?p=42279\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/innodebt.com\/?p=42279#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/innodebt.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Why the Fed\u2019s decision to hold rates steady could lift gold back above $2,000\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/innodebt.com\/#website\",\"url\":\"https:\/\/innodebt.com\/\",\"name\":\"Funding Factories\",\"description\":\"Latest Finance News and Updates\",\"publisher\":{\"@id\":\"https:\/\/innodebt.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/innodebt.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/innodebt.com\/#organization\",\"name\":\"Funding Factories\",\"url\":\"https:\/\/innodebt.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/innodebt.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/innodebt.com\/wp-content\/uploads\/2023\/08\/ff-dark-logo-1.png\",\"contentUrl\":\"https:\/\/innodebt.com\/wp-content\/uploads\/2023\/08\/ff-dark-logo-1.png\",\"width\":780,\"height\":140,\"caption\":\"Funding Factories\"},\"image\":{\"@id\":\"https:\/\/innodebt.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/innodebt.com\/#\/schema\/person\/742362d9a293429cc45829acf21919b4\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/innodebt.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/innodebt.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1693518183-96x96.png\",\"contentUrl\":\"https:\/\/innodebt.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1693518183-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/innodebt.com\"],\"url\":\"https:\/\/innodebt.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Why the Fed\u2019s decision to hold rates steady could lift gold back above $2,000 | Innodebt","description":"Gold has more reasons to rise in the wake of the Federal Reserve\u2019s decision in November to stand pat on interest rates, helping to make a price climb back","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/innodebt.com\/?p=42279","og_locale":"en_US","og_type":"article","og_title":"Why the Fed\u2019s decision to hold rates steady could lift gold back above $2,000 | Innodebt","og_description":"Gold has more reasons to rise in the wake of the Federal Reserve\u2019s decision in November to stand pat on interest rates, helping to make a price climb back","og_url":"https:\/\/innodebt.com\/?p=42279","og_site_name":"Innodebt","article_published_time":"2023-11-05T04:30:58+00:00","article_modified_time":"2023-11-05T04:31:00+00:00","og_image":[{"width":1280,"height":640,"url":"https:\/\/innodebt.com\/wp-content\/uploads\/2023\/11\/1699158659_social.jpeg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/innodebt.com\/?p=42279#article","isPartOf":{"@id":"https:\/\/innodebt.com\/?p=42279"},"author":{"name":"News Room","@id":"https:\/\/innodebt.com\/#\/schema\/person\/742362d9a293429cc45829acf21919b4"},"headline":"Why the Fed\u2019s decision to hold rates steady could lift gold back above $2,000","datePublished":"2023-11-05T04:30:58+00:00","dateModified":"2023-11-05T04:31:00+00:00","mainEntityOfPage":{"@id":"https:\/\/innodebt.com\/?p=42279"},"wordCount":1022,"commentCount":0,"publisher":{"@id":"https:\/\/innodebt.com\/#organization"},"articleSection":["Investing"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/innodebt.com\/?p=42279#respond"]}]},{"@type":"WebPage","@id":"https:\/\/innodebt.com\/?p=42279","url":"https:\/\/innodebt.com\/?p=42279","name":"Why the Fed\u2019s decision to hold rates steady could lift gold back above $2,000 | Innodebt","isPartOf":{"@id":"https:\/\/innodebt.com\/#website"},"datePublished":"2023-11-05T04:30:58+00:00","dateModified":"2023-11-05T04:31:00+00:00","description":"Gold has more reasons to rise in the wake of the Federal Reserve\u2019s decision in November to stand pat on interest rates, helping to make a price climb back","breadcrumb":{"@id":"https:\/\/innodebt.com\/?p=42279#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/innodebt.com\/?p=42279"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/innodebt.com\/?p=42279#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/innodebt.com\/"},{"@type":"ListItem","position":2,"name":"Why the Fed\u2019s decision to hold rates steady could lift gold back above $2,000"}]},{"@type":"WebSite","@id":"https:\/\/innodebt.com\/#website","url":"https:\/\/innodebt.com\/","name":"Funding Factories","description":"Latest Finance News and Updates","publisher":{"@id":"https:\/\/innodebt.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/innodebt.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/innodebt.com\/#organization","name":"Funding Factories","url":"https:\/\/innodebt.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/innodebt.com\/#\/schema\/logo\/image\/","url":"https:\/\/innodebt.com\/wp-content\/uploads\/2023\/08\/ff-dark-logo-1.png","contentUrl":"https:\/\/innodebt.com\/wp-content\/uploads\/2023\/08\/ff-dark-logo-1.png","width":780,"height":140,"caption":"Funding Factories"},"image":{"@id":"https:\/\/innodebt.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/innodebt.com\/#\/schema\/person\/742362d9a293429cc45829acf21919b4","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/innodebt.com\/#\/schema\/person\/image\/","url":"https:\/\/innodebt.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1693518183-96x96.png","contentUrl":"https:\/\/innodebt.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1693518183-96x96.png","caption":"News Room"},"sameAs":["https:\/\/innodebt.com"],"url":"https:\/\/innodebt.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/innodebt.com\/index.php?rest_route=\/wp\/v2\/posts\/42279","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/innodebt.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/innodebt.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/innodebt.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/innodebt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42279"}],"version-history":[{"count":1,"href":"https:\/\/innodebt.com\/index.php?rest_route=\/wp\/v2\/posts\/42279\/revisions"}],"predecessor-version":[{"id":42281,"href":"https:\/\/innodebt.com\/index.php?rest_route=\/wp\/v2\/posts\/42279\/revisions\/42281"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/innodebt.com\/index.php?rest_route=\/wp\/v2\/media\/42280"}],"wp:attachment":[{"href":"https:\/\/innodebt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/innodebt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/innodebt.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}