Gold Dips on Rate Hike Expectation

Posted By: Religare
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Gold futures closed lower in the international market on Wednesday bucking their typically inverse relationship to a weaker dollar as sentiment remained cautious following a recent rally on top of expectations that the Federal Reserve could further tighten interest rates going forward.

Gold Dips on Rate Hike Expectation

Gold and the U.S. currency unit typically move inversely as a cheaper dollar is beneficial to gold investors using another currency. Both markets are affected by interest-rate policy as higher rates support the dollar but also dull the appeal of nonyielding gold in favor of interest-bearing assets.

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