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RISING INTERST RATES HIGHER U.S. DOLLAR ALSO WEIGING ON GOLD NEWS WWW.JUPITERR.CO

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Not only is gold getting hit from widespread negative sentiment in the commodity space, but it is also being dragged lower on expectations that the Federal Reserve will continue to raise interest rates, which is supporting the U.S. dollar near a one-year high
followin tuesday,s moneytary poolicy .meeting, the Federal Reserve, while keeping interest unchanged in a range between 2.00% and 2.25%, reiterated its optimistic view on the economy, saying that activity has been rising at a strong rate.
“The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced.” the central bank said in its statement.
David Madden, market analyst at CMC markets said Thursday’s monetary policy statement is probably having more of an impact on gold than the decline in oil prices.
“It’s not a coincidence that gold is down sharply the day after the Federal Reserve said it will continue to raise interest rates,” said David Madden, market analyst at CMC Markets. “If the U.S. dollar break’s its 2018 highs then that will kick gold back into a downtrend.”
Christopher Vecchio, senior currency strategist at DailyFx.com, said that he also sees further weakness in the gold market because of a stronger U.S. dollar.
“It’s going to be a tough environment for gold because interest rates are going up, real interest rates are going up and that is supporting the U.S. dollar,” he said. “I think we are going to see lower gold prices so I am staying away from the market for now.”
Colin Cieszynski, chief market strategist, SIA Wealth Management, said that not only is oil prices creating negative sentiment in the marketplace, but lower prices are deflationary, just not enough to force the Federal Reserve off its path of higher interest rates. Rising real interest rates because of low energy prices will be a significant negative for gold going forward.
Cieszynski said that he could see prices falling to $1,180 in the near-term as interest rate expectations weigh on the market.
“The stars just aren’t lining up for gold right now as energy prices fall and the Fed continues to raise interest rates.

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