Macroeconomic impacts on Gold
Due to increased inflation, it is expected that there will be a total of 7 interest rate hikes in the coming year (25 basis points each) to a total rate of 1.5% (last time rates were at this level was in the pre-pandemic 2019)
The first of which will be announced on Tuesday, March 15th - The Federal Reserve is expected to increase rates by 25 basis points. Increased rates will strengthen the dollar and lower demand for Gold. Which should have a pronounced effect as the U.S. controls the most gold in the world with 8,133 tons (World Gold Council)
However, the U.S. is just one part of this picture. The Ukraine-Russian conflict pushed Gold prices higher, leading to the breakout we see today. The 4th round of Ukraine-Russia peace talks is expected to occur on Monday, signaling increased potential for a diplomatic resolution to the ongoing war. Reduced possibility of further conflict will lead to a decrease of investors fleeing to safe-haven assets.
The first of which will be announced on Tuesday, March 15th - The Federal Reserve is expected to increase rates by 25 basis points. Increased rates will strengthen the dollar and lower demand for Gold. Which should have a pronounced effect as the U.S. controls the most gold in the world with 8,133 tons (World Gold Council)
However, the U.S. is just one part of this picture. The Ukraine-Russian conflict pushed Gold prices higher, leading to the breakout we see today. The 4th round of Ukraine-Russia peace talks is expected to occur on Monday, signaling increased potential for a diplomatic resolution to the ongoing war. Reduced possibility of further conflict will lead to a decrease of investors fleeing to safe-haven assets.
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