From Kris Sayce – Port Phillip Insider (Australia) –
Whatever the Fed does, it’s already having an effect on the markets.
Markets rise and fall based on what investors think the Fed will do. And what investors think the Fed will do changes each day.
One place the Fed’s potential action — or inaction — is having an impact on is the gold market.
In US dollar terms, the gold price is up 23.5% this year:
Gold rallied as it appeared unlikely that the Fed would raise rates this year. But that view has changed in recent weeks.
The rally has come to a halt.
So is that it? Is this the end of gold’s run for now?
We wouldn’t be so bold as to suggest that. But we will concede that, as long as the market thinks there’s even a chance of a rate rise, gold probably won’t move anywhere fast.