THE FED VS GOLD: "25 BASIS POINTS RAISE FOR 2% DROP"

Hot news!

As The Fed raised 25 basis points of interest rate, gold dropped immediately. As a conclusion of Federal Reserve's Open Market Committee on Wednesday (June 14th), the interest rate raised reaching 1.25%.

We all know, when interest rate goes up, people expect more gain from their investment in stock, bond, etc. This means the government has a confidence in the economy. 

Meanwhile, the gold market reacted negatively. It was common that US Dollar and Gold had a negative correlation. When The Fed raised on June 14th, gold's price moved down. Yesterday it hit the lowest point in USD 1242/ troy ounce and today, it touches 1245.2. It drops more than 2% from its highest position about a week ago (USD 1280/ troy ounce).

Since it's a fundamental policy, this price will likely stay longer, at least until the end of June. What you need to know is, it's true that gold drops, but not for that long. It happened before, gold got low when The Fed raised but soon moved up (remember the end of 2015?).

So, why don't you buy gold now?