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Gold is getting crushed by the US Federal Reserve

Ben Moshinsky   

Gold is getting crushed by the US Federal Reserve

Goldfinger

Screenshot/YouTube

Gold's stunning rally, which saw it gain more than 15% in the first quarter of 2016, is going into reverse.

Gold has seen a huge rally in 2016, enjoying its best quarter in nearly three decades at the start of the year, gaining around 18% to the end of March, and coming close to the top of the charts when it comes to global asset strength.

But the US Federal Reserve has called a halt to party for the moment.

The minutes of the Federal Reserve's April meeting released on Wednesday showed that the Federal Open Market Committee could raise its benchmark interest rate next month if the economic data warrant it.

Most members of the policy-setting committee said that they would be willing to vote for a hike if the labour market keeps getting better and inflation continues to approach their 2% target.

Tightening monetary policy is generally seen as bad news for the gold price, and investors have taken note. The gains seen at the start of May have all been wiped out and the price is now back to levels seen in April.

Here is the chart showing the gold price over the last month:

Gold1

Investing

And here is the chart showing the drop in the gold price over the last day:

goldprice1

Investing.com

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