Precious metals up after FED raises interest rates
The Federal Reserve raised its interest rates up from 1.50% to 1.75% today.
As from the end of 2016, the FED is raising their interest rates after a period of 10 years of decreasing them. Since 2016 the FED is slowing down their policy of quantitative easing, which basically means flooding the markets with billions of Dollars and buying debts/bonds in extreme forms from the financial markets with the goal to achieve inflation of around 2%. This plan looks like it succeeded.
What we see from 2018, the FED is selling bonds and liquidating their financial assets to the market, combined with higher interest rates.
It is expected that interest rates continues to rise even further than expected, due to economic growth (2.5-3%) and a rapidly growing inflation.
With this in mind we noticed, after the FED’s decision to increase the interest rates, an increase in the prices of gold and silver, meaning that the metals are still be seen as a safe haven and a hedge against inflation.
Although prices have gone up sharply today, around 2.5% for silver and 1.75% for gold, the metals are still extremely low priced and therefore still a buying opportunity.
Make your decisions wisely!
Enjoy!
I was a bit surprised as the hike was priced in weeks ago, usually, PMs go down when the FED raises rates. We are getting rewarded as the FED spends fiat like a drunken soldier on leave.