Gold News: Potential Interest Rate Hike Strengthens Gold Price
Gold News
Gold have reached its 5 weeks higher level recovering from its lower value on July 5th. Spot gold moved up 4 percent during the week, hitting a peak of $1,168.40 an ounce. When there are negative economic news, investors tend to turn to the heaven value. Gold is perceived to be a really efficient alternative when the world stocks collapsed and reached their worst week of the year. This fall is linked to the worrying Chinese factory data. Investors are more attracted by the safety of the gold.
Besides the impact of the Yuan devaluation, the Federal meeting has also played a key role on the gold climbs. Investors have postponed their anticipations about the US interest-rate increase in September. In fact, the Federal Reserve said on Wednesdays that they need more recovering signs to increase their rate. The economy still seems to be too fragile as there are a low inflation and a weak global economy. The rate’s increase will more probably happen on December.
When the rate will increase, the appeal for gold will inevitably decrease, as it doesn’t pay interest but this will not happen as sooner. So the falling bets on the US rate increase combined with the devaluation of the Yuan boost the demand for the gold, which justify the increasing gold price.
