Goldgroup Mining Stock Sees Brief Rally After Fed Rate Hike

The Goldgroup Mining (GORO) stock price jumped over 6% in early trading Thursday after the U.S. Federal Reserve raised interest rates for the first time in three years. However, the stock quickly retreated to a 0.6% gain by 11:11 a.m. ET.

The Fed's decision to raise interest rates by 0.25% to combat inflation is expected to make borrowing more expensive and bond yields higher. This shift may incentivize savers to put their money in bonds or bank accounts rather than investing in gold, which does not pay interest.

Gold prices fell to $4,333 per ounce on Wednesday, its lowest price in a month, but rebounded slightly this morning. However, the bounce is already fading, and gold prices are currently up only 0.2% at $4,397 an ounce.

Goldgroup Mining's financial situation is precarious: it has lost money for five straight years and relies heavily on rising gold prices to turn a profit. Analysts polled by S&P Global Market Intelligence believe the company might break even this year, but falling gold prices could derail that prediction.