After interest rate decision, there was some notable movement from the precious metal
Interest rate announcements always grab headlines and have notable impacts on the market – even when there isn’t actually any adjustment from the central bank.
For proof, just take a look at the movement of gold following the Fed Reserve’s announcement yesterday. Having traded flat for the bulk of the day, the announcement saw prices for gold shoot up – leaping by 2.35 per cent to stand at $1,261.38 per troy ounce. That’s a leap from $1,241.14 right before the announcement.
There was similar movement from silver too – it enjoyed a 2.30 per cent leap to stand at $15.63 per troy ounce following the announcement. As such, the ETF iShares Silver Trust leapt by 2.27 per cent during the day.
The announcement saw the Federal Reserve maintain interest rates within the USA at its current range of 0.25-0.5 per cent. However, what perhaps grabbed greater interest from investors was the Fed changing its prediction of four interest rate hikes during the year down to just two.
The choice to maintain interest rates at their current level, coupled with the reduction in the interest rate hike calendar, meant that precious metals garnered more interest as they are non-interest bearing. An interest rate hike would have lowered investment demand for the metals and had a negative impact on their prices.
Elsewhere, the US dollar was trading down following the announcement: slipping by 0.95 per cent.
For proof, just take a look at the movement of gold following the Fed Reserve’s announcement yesterday. Having traded flat for the bulk of the day, the announcement saw prices for gold shoot up – leaping by 2.35 per cent to stand at $1,261.38 per troy ounce. That’s a leap from $1,241.14 right before the announcement.
There was similar movement from silver too – it enjoyed a 2.30 per cent leap to stand at $15.63 per troy ounce following the announcement. As such, the ETF iShares Silver Trust leapt by 2.27 per cent during the day.
The announcement saw the Federal Reserve maintain interest rates within the USA at its current range of 0.25-0.5 per cent. However, what perhaps grabbed greater interest from investors was the Fed changing its prediction of four interest rate hikes during the year down to just two.
The choice to maintain interest rates at their current level, coupled with the reduction in the interest rate hike calendar, meant that precious metals garnered more interest as they are non-interest bearing. An interest rate hike would have lowered investment demand for the metals and had a negative impact on their prices.
Elsewhere, the US dollar was trading down following the announcement: slipping by 0.95 per cent.
