Gold rises by more than $30 and 1.4% in one hour.. Why? By – It rose strongly in the last hour coinciding with Jerome Powell’s announcement, which came after the Fed’s announcement.

It rose from the level of $2,160 to $2,191 in an hour and a half, according to the chart shown below. Why did the strong rise come despite interest rates being fixed at 5.5% without change?

The secret of gold’s rise after the US Federal Reserve’s decision

The US Federal Reserve revealed that the Federal Reserve is maintaining its expectations of reducing interest rates by 75 basis points in 2024, without change from previous expectations, despite the high inflation data in the January and February data.

Jerome Powell, Chairman of the US Federal Reserve, said during the press conference that the January and February data were high but not “catastrophic” and that the Fed will not exaggerate its reaction to them and will wait for more data.

The US Federal Reserve confirmed that the interest rate decision has become a double-edged sword, as keeping interest rates too high may also lead to economic harm, such as an untimely cut. The Fed’s statement and its president’s speech indicated a thought to reduce the pace of reducing the Fed’s budget to avoid any bad scenario for the American economy.

Powell’s speech dampened some traders’ expectations about the possibility of easing cut expectations after inflation data came in higher than expected.

Investors now expect the first cut decision to come at the next June meeting. It fell by more than 0.3% after the Fed Chairman’s statements, while gold prices and Wall Street indices rose.

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