Gold has managed to find good support over the last 3 trading sessions at around $1,340 while also making a higher top from the September highs and the chances for a push higher looks promising.
The latest Fed rate decision yesterday was no surprise and rates remained on hold with the following statement pointing to a rate hike in March which was already factored into the gold market long ago.
It was interesting that Fed president Janet Yelen noted in the following statement that she expects inflation in the US to pick up this year and eventually hit the target rate of between 2 and 3 percent.
The Fed has already been quite aggressive with their rate hikes considering inflation remains below their target and it’s possible that after the rate rise in March, they may have to delay any further moves until inflation actually does pick up as they can’t keep raising rates in a low inflationary environment.
At least 3 rate hikes are expected this year by the Fed but when as expected, inflation remains subdued and they find that they have to leave them on hold, gold is set to benefit.