Gold Recovers Slightly After Fed Rate Hike
The US Federal Reserve's interest rate hike has led to a slight recovery in gold prices, which had hit a near six-week low on Wednesday. Spot gold rose by 0.8% to $4,295.26 per ounce as of Thursday morning GMT.
Despite this uptick, analysts believe that gold prices will remain range-bound until oil prices decline further. According to Kelvin Wong, a senior market analyst at OANDA, 'Oil prices remain a key factor to watch... If oil prices continue to decline, that could support gold prices moving higher.'
The Fed's hawkish message has already been priced into the market, with many expecting further policy tightening in the coming months. This reduces the appeal of gold as an inflation hedge, making it less attractive compared to interest-bearing assets.