The Fed Hiked Rates — What Happened to the Gold Price?

Will the Fed hike rates again?

In a press conference following the release of the new decision, Fed Chair Jerome Powell said the committee will monitor future events as they relate to its future decisions.

“In light of these uncertain headwinds along with monetary policy restraint we’ve put in place, our future policy actions will depend on how events unfold.

“In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” he said.

Following a steep climb reaching nearly US$2,030 price point in value shortly before the announcement by the Fed, gold’s price per ounce began lowering during the day.

Gold finished the trading session at a price per ounce of US$2015.98.

When asked if the market and investors should read today’s decision as meaning the Fed will pause a rate hike for its next meeting, Powell said a “decision of a pause was not made today.”

Instead, the chair once again stressed that the committee will monitor future events to make its decisions.

In previous statements, the Fed had indicated it would continue to anticipate the use of rate increases as a way to combat inflation. While experts begin to ponder as to the next steps for the Fed, signs are pointing to a relief in future rate hikes.

However, the Fed still noted inflation remains “elevated.”

“What’s most important is how they convey the potential for a pause going forward,” Collin Martin, fixed income strategist at Charles Schwab, told CNBC. “How do they do that while also probably leaving the door open a little bit? That will be a balancing act between suggesting a pause is in the cards but still is dependent on incoming data should inflation turn higher going forward.”