Gold prices continued their weeks-long slide, with many traders awaiting the decision of the US Federal Reserve regarding a potential interest rate hike. The biggest question for traders is “does the Fed view the current labor and inflation dynamic as having met their conditions for a hike in rate?” said Erik Gebhard, a co-founder of Altavest Worldwide Trading.
The two-day policy meeting of the Fed concludes this Thursday, with most traders reluctant to make significant bets on gold before learning the result. Consequentially, trading volumes have been low this week. If interest rates are lifted, even slightly, the appeal for gold as an investment vehicle will decline, as gold does not bear interest.
Of course, for investors who are looking to purchase gold as a long-term investment, the news could be welcome, allowing them to purchase physical gold at a cheaper price.