: Gold prices end higher, move up after the Fed rate decision

Gold futures settled higher on Wednesday, then moved up in the electronic trading shortly after the Federal Reserve announcement. The central bank agreed to raise its benchmark fed funds rate by 25 basis points to 5.25% to 5.50% range, as expected, and said it remains “highly attentive” to inflation risks. Rate hikes “tend to suppress gold prices in the near term,” as higher rates support the U.S. dollar, said Jerry Braakman, president and chief investment officer of First American Trust. However, higher rates “ultimately will increase the risk of recession by slowing economic activity in the U.S.,” he said, so in the medium term, “we’ll see a high probability of the economy either entering recession or being stuck in stagflation.” Gold “does well in both scenarios,” said Braakman. August gold GCQ23 was at $1,971.40 an ounce shortly after the announcement. That follows a settlement at $1,970.10 an ounce, up $6.40, or 0.3%, for Wednesday’s session.

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