As anticipated, the US Federal Reserve has raised interest rates by a quarter of a percentage point, with only three more hikes expected for next year instead of the predicted four, causing a rally in the price of gold.
According to reports, the price of gold had weakened prior to the Fed announcement, but after the news was announced it rallied due to limited short covering, as happened in the previous four interest rate increases. The price of gold could increase further over the next few months.
Analysts now expect the Fed to limit interest rate increases to a further three times in 2018, buoying the price of gold, but the increases will need to be larger if they are to lure investors away from buying gold.
US gold futures for February delivery settled up US$8.50, or 0.7 per cent, at US$1,257.10 per ounce, the highest price on closing since Dec. 6.
Source article: http://www.taipeitimes.com/News/lang/archives/2017/12/19/2003684203