Fed Rate Hike Uncertainty May Ease Gold Price Volatility

Gold and silver prices may remain stable if the US Federal Reserve keeps interest rates unchanged, according to Surendra Mehta, Secretary at the India Bullion & Jewellers Association (IBJA).

Mehta attributes a recent slowdown in gold demand to uncertainty over potential changes to import duties and expectations of a Fed rate hike. He believes that if the Fed refrains from raising rates, consumer interest in precious metals may return.

A possible rate hike could increase debt burdens in the US and put pressure on global financial markets, Mehta said. With expectations of no change in interest rates, he sees an opportunity for buying interest to resume in gold and silver.