PRESS ROOM
Gold is holding its ground despite Fed’s 50bps rate increase
Friday 06th May '22
As expected, the US Federal Reserve has implemented a 50bps interest rate increase for the first time since 2000 and accompanied it with a signal for further such increases in its subsequent two meetings. But given markets were largely expecting this hawkishness from the central bank, the move has not weighed on sentiment towards gold. Rather, investors are taking the view that the Fed will be cognizant of US economic growth and might not be as hawkish for the rest of the year as is currently priced in. If that is indeed the case, we may see the US dollar and Treasury yields pulling back and gold maintaining its strength.