Gold is remaining remarkably perky despite the near certainty of the Federal Reserve implementing another interest rate hike when the committee meets next week.
Even though the macroeconomic environment looked set to provide a challenging scenario for gold, lingering fears over the true health of the global economy have kept the precious metal well supported with the price pushing up towards $2,000 an ounce.
How long gold can continue to trade at such high levels remains to be seen with the reaction to next week’s Fed rate decision a key staging post for gold’s long-term durability. Considering that another increase is priced in already, gold may yet prove able to shrug off the latest hike but if there is an indication in the press conference and supporting commentary that further hikes are still likely, then gold could fall sharply.
For now, gold continues to confound by remaining so resilient but it would take a brave investor to see further upside potential for the price.
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