GOLD could look beyond the Fed
$GOLD
Gold prices hit a one-month high on Wednesday. Rising consumer prices have reinforced its appeal as a hedge against inflation.
Investors seem to be looking past an impending interest rate hike by the Federal Reserve.
The Fed hike (50bp) would be priced in and investors could be singularly focused on inflation.
However, in the short term, the rise in US interest rates should put a lid on the advance in gold prices.
In the long term, gold could ignore the rise in US rates, and focus on inflation and the Ukraine crisis, the outcome of which would be at an impasse. As such, it would also reinforce the attractiveness of gold as a safe haven.
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