The Fed Rate Hike Narrative Is Increasing Price Pressure on Gold And Equities
Earlier this afternoon the Fed agreed to increase the interest rate by 0.25%. Moreover, they also signaled that they will add one more rate hike in the future before the end of the year. The market reacted negatively to this future possibility of another rate hike.
United States' Federal Reserve has decided to increase the interest rate by 0.25%, which officially means the rates are now 3.75% - 4%. This rate hike has been expected by major players in Wall Street, and it has been putting downward price pressure on most equities as well as precious metals.
On top of the rate hike, the Fed also hinted for another possibility of a rate increase before the end of this year. If they actually do that, there's a lot of fear that the market will continue to go lower.
As a result, gold price is struggling around $4,264 per troy ounce, or $137.12 per gram. Silver is also down to $62.93 per troy ounce. Equities are not really doing much better, either. SP500 was trading at 7551 before the end of the trading session today.
A lot of speculative traders as well as long-term investors are now looking for the next hint where the market might go, but it looks like the persistent inflation with the ongoing Iran war and high oil prices may last for awhile.
Related assets: Gold, Silver, Palladium, Platinum