Gold News: Gold Regains Recent Loss, Price Becomes Harder to Predict

Gold News

Much to the surprise of hedge funds, gold’s price has been creeping upward this past week, due to recently released weak housing that has pressured the U.S. dollar. U.S. home levels decreased by 11.5%, which is the lowest in 10 months.

Gold News

According to U.S. government data, hedge funds and many other money managers have placed wrong way wagers on gold  in five of the last nine weeks.  This past week, gold increased 0.3% to 1,166.20 an ounce on Friday. This happened after the week before, when gold had decreased by 1.7%.

Part of what has made gold’s price  so unpredictable of late has been the U.S. Federal Reserve Policy  choosing to delay a seemingly inevitable interest rate hike. A rise in the interest rate would strengthen the dollar, and in turn, weaken gold’s price. The interest rate is already lower than it’s ever been, so most investors are anticipating a rise soon.

There is a two-day  fed reserve policy meeting later this week.  However, the chances of the interest rate being raised during the meeting are considered unlikely by most.  It’s more likely that a rise  will come some time between December and March. The debate about whether or not their will be a rate hike has left people unsure of what to do with gold. Some businesses like Adrian Day Asset Management are bullish towards gold as they believe a weaker global economy will slow down U.S. growth, and prevent the rate hike. While other businesses like Goldman Sachs Group Inc. remain bearish as they still think the rate hike will happen sooner or later.

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