Hey Traders, Today the Fed will make the decision weather or not to raise the federal funds rate. Many people believe that higher interest rates are bad for Gold
however higher interest rates in THIS economic environment are NOT bad for Gold
. This cycle of rate hikes have been extremely bullish
for the metals. In Fact, it was the rate hike in December of 2015 that caused gold
to bottom and then rally for the first half of the year. The Fed began to promise more rate hikes in 2016 however we did not get one until December.. Investors were believing that the fed was actually going to raise rates throughout 2016 while a select few (including myself) were saying no wayyy. As Investors Started to figure out that the Fed was blowing smoke up there you know what, they began to lose faith in the rate hikes around September of 2016. Gold
sold off dramatically, almost wiping out the entire rally that occurred in the beginning of 2016 (78% Decline). Gold
sold off dramatically but what made it stop? Look on the chart below and you will see all of the recent rate hikes by the fed and when they took place. The Metals bottomed in December of 2016 again (Just like 2015) and began to take off higher due to a rate hike! Again in March, the metal bottomed and took off higher! I am expecting a quarter of a point rate hike today and I believe this will be very bullish
for the metals! This may be the surge that pushes price through $1,300-$1,310. If price breaks through that zone, $1,350 would be the next stop for gold!
Please check out my recent idea called "Why Gold
Will Most Likely Continue Higher" to see the trade setup shown above. I have linked that idea below. Please comment below with any analysis or questions, thanks traders & good luck trading today!