Short term interest rate markets are pricing in nearly a 100% chance of a Fed hike on Wednesday this week when the Fed meet. Interest rates are expected to rise to 5.375% from 5.125%. Gold prices have been gaining recently after the latest US CPI print showed a decent fall in the core reading.
So, what will happen to gold prices over the Fed meeting? Over the last 10 years gold has gained on average +0.94% in the 10 days after meetings where the Federal Reserve has hiked interest rates. So, are further gains ahead for gold?
Major Trade Risks:
The main risk here would be a hawkish Fed policy meeting where they stress higher rates still to come.
Remember don’t just trade it, Seasonax it!