NEW YORK (Scrap Register): Gold has continued its normal trading pattern around Federal Reserve meetings, at least based on the last few years, said Commerzbank in a snippet.
Gold fell in the run-up to a meeting that ended Wednesday with a 25-basis-point rate hike that markets had largely factored into prices. This was the sixth rate hike in the current cycle, and the Fed expressed optimism over the U.S. economy, Commerzbank added.
Still, officials continued to suggest only three rate hikes this year rather than more, enabling gold to rise. The fact that further rate hikes are being forecast for the next two years was ignored by the market, however, Commerzbank added.
In his first press conference, the new Fed Chair Jerome Powell stressed the central bank’s gradual approach, seamlessly following on from the strategy pursued by his predecessor Janet Yellen.
The gold price has also shown the same trading pattern this time around is it did before other ‘major’ Fed meetings -- weak before the meeting and then significantly recovered afterwards. The recovery may well continue for a few more days.