Gold: A much better investment after Fed


NEW YORK (Scrap Register): Federal Reserve commentary last week that U.S. interest-rate hikes should continue to be gradual portends more gains ahead for gold, said Phil Flynn, senior market analyst with Price Futures Group.

He pointed out that a post-Fed rally this week included the biggest single-day gain for gold since the U.K. Brexit vote last summer.

“It went up…mainly because the interest-rate increase (announced Wednesday) was already priced in and because the Federal Reserve used the word ‘gradual’ when it came to raising interest rates,” Flynn added.

“That seems to suggest that the market’s fears that the Fed was going to be have a more aggressive path on interest rates were overplayed. It changes the complexion of the dollar and the perception that the Fed was going to tighten too quickly. So now, gold looks like a much better investment as we go forward,” Flynn noted.

Further, investors may start looking at gold as a potential hedge if the rising stock market should falter, he added.

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