Posted 14th June 2023

Gold Price News: Gold Holds Near $1,950 on Anticipated Fed Rate Pause

gold kinesis bar bullion

Gold remains around the $1,950 an ounce level it has been oscillating around for the last week or so as expectation mounts that the Federal Reserve will indeed keep interest rates where they are when its much-anticipated announcement is released later today.

Yesterday’s US inflation data that showed another decline in the pace at which consumer prices are rising has all but confirmed market expectation leading up to today’s rate decision that the Fed will indeed press pause.

With the gold price typically struggling when interest rates are rising, the physical metal not providing investors with a yield, the prospect of the Fed holding off on a further increase at today’s committee meeting first helped rise above $2,000 an ounce back in May and has since helped keep it at levels that remain historically high.

gold price chart kinesis exchange
Gold price ($/g) – 3-month view – from Kinesis Exchange

For yield-seeking investors, gold KAU offers the best of both worlds, the security of a physically-backed asset combined with a monthly yield based on transactions using the digital currency in the previous month.

While today’s announcement looks like a done deal, attention will swiftly switch to where the Fed will send interest rates over the rest of the year. Here expectation has shifted with traders not forecasting a September peak, rather than the July one previously anticipated. 

This would present a further headwind for gold right at a time when an increasingly buoyant stock market is reducing the metal’s safe-haven appeal and suggests that the highs achieved in May are likely to remain the peak for the year.

This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.