Gold to re-establish uptrend after rate hike becomes fact
THE decision on interest rate hike is on everyone's radar this week. Fed Fund Futures (FFF) is already pricing in a 98 per cent chance of a rate hike on Dec 13 at the Federal Open Market Committee (FOMC) meeting where the Fed Funds Rate (FFR) is set to rise from 1.25 per cent to 1.50 per cent.
Looking back at how far we have come from this rate hike cycle shows an interesting relationship between the FFR and gold.
Contrary to popular belief where interest rate hikes would lead to a lower gold price, the price action around interest rate hike days since December 2015 showed the opposite reaction.
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