Price Of Gold Tumbles From 7 Week High
Dwayne Buzzell | Jan 14, 2017 02:54PM ET
In the last year, the green bucks gained its strongest bullish momentum in the market after the FED hike their interest rate on the basis of 25 points in the global market. Before that, the first initial bullish momentum was started in the green bucks during the U.S presidential election held on 8th November 2016.The newly elected president Mr. Trump stated that they are going to increase the fiscal spending and the inaugurate tax cut policy and such an optimistic statement gave the dollar a strong bullish momentum in the market. Since the trading CFDs went overly cautious as FED chairperson Janet Yellen stated that they are going for possible three rate hike in the Year 2017.Since the price of gold is measured in U.S dollar such an important event like interest rate hike decision is going to affect the gold market severely.Though the gold market is now greatly supported by the critical support level in the market but if the FED manages to go for a rate hike as planned then we will see a new historic low in the price of gold. Most importantly the central bank is also going to pressurize the FED for at least two rates so that they can adjust the inflation rate. But the FED will be extremely careful about their rate hike decision since an immature rate hike will significantly weaken the U.S economy in the long run.
Summary
The price of gold started its bullish rally in the market after the market hit the critical bottom. Due to the recent slip of the U.S dollar index from its 14 years high the price of gold rallied hard in the market. Most of the professional traders are now worrying about this recent bullish movement since the U.S economy is doing significantly well. If the FED manages to hike their interest rate in this year than the gold bulls will have a tough time in the market. Due to the recent slip of the gold price, most of the professional traders are now staying on the sideline for the better trading opportunity.
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