Gold price soars as investors see Fed’s July hike as final in current cycle – by Sagar_Dua24 Gold XAUUSD Fed GDP SEO
nesday. The precious metal remains on the buying list on Wednesday after the Fed raised interest rates by 25 basis points to 5.25%-5.50%, as expected by market participants. Also, the Fed delivered less-hawkish guidance for the September meeting and passed on responsibility for any further action on economic data. is going through tough times as investors hope that the United States central bank has put the last nail in the coffin.
After Fed policy decisions, investors are awaiting Gross Domestic Product figures for the second quarter, June’s Durable Goods Orders, and core Personal Consumption Expenditure data. Meanwhile, Durable Goods Orders for June are expected to expand by 1.0% on month, easing from the 1.8% increase recorded in May. Decent momentum in demand for durable goods might keep core inflation stubborn ahead.
When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar as it makes the US a more attractive place for international investors to park their money. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
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