Surge In Gold Prices Back to 2022 Highs

By Pete Southern in Gold and Oil News | March 24, 2023 6:33 | Tags: , , , ,

The recent move by the U.S. Federal Reserve to raise rates by 25 basis points suggests that it may have reached the peak of its rate hike cycle, thereby causing a surge in the price of gold around the globe. This is partly because it makes the precious metal a more attractive investment option for investors due to the prolonged period of low-interest rates.

Following a 25 basis point rate hike by the Federal Reserve, investors became worried about the potential for dovish actions in the future, as indicated by the Rate Statement. Despite Fed Chair Powell’s dismissal of the idea of a rate cut in 2023, the US Dollar took a hit as a result. This helped propel Gold higher and surged to hit a high above the $2000 level it has not touched since early 2022.

As the banking sector reels from the closure of Silicon Valley Bank and the collapse of Credit Suisse, investors have turned to gold and Treasuries for refuge.

Meanwhile, in the US, new claims for unemployment benefits decreased slightly last week, while the Bank of England raised interest rates for the 11th consecutive time on Thursday. However, the Bank of England’s decision was accompanied by an assertion that a recent upswing in inflation was likely to be short-lived, leading some to question whether this marked the end of the rate hike trend.

As expected, the Bank of England increased its Bank Rate from 4.00% to 4.25%. In a manner similar to the Federal Reserve’s recent statements, the British central bank has played down the mounting concerns within the worldwide banking industry and is concentrating instead on achieving its 2% inflation target.

Pete Southern About Pete Southern
Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.

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