Gold Holding Gains As Markets Doubt Fed Rate Hikes Next Year – by Neils Christensen (Kitco News – December 14, 2017)

(Kitco News) – Gold prices have pushed off recent lows as markets continue to doubt that the Federal Reserve will be able to raise interest rates three times next year, according to analysts.

Gold is holding on to modest gains Thursday as investors continue to digest what some have described as a hawkish tone from the U.S. Federal Reserve. After raising interest rates Wednesday, the U.S. central bank said that it expects to raise interest rates three times next year. The Fed also increased its economic outlook, saying that it sees the U.S. economy growing 2.5% in 2018.

February gold futures last traded at $1,255 an ounce, up 0.55% on the day. Jasper Lawler, senior market analyst at London Capital Group, said that the U.S. dollar is not focusing on the Fed’s projections and instead is focusing on weak inflation pressures.

“Fears over low inflation appear to be concerning the market more than the Fed right now. The Fed still believes it will hike three tines next year, the market is not so sure that this is achievable while inflation refuses to tick higher,” he said. “Now there is a long waiting game ahead, which the dollar may struggle to cope with.”

David Madden, said that with so many new faces coming to the central bank in 2018, the current projection could easily change. Bill Baruch, president of Blue Line Futures said that he thinks gold could continue to push higher as doubts remain over the three rate hikes in 2018.

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