The background of raising interest rates is that the economic growth rate is too fast and there is a risk of overheating. In order to balance the economic risks, the central bank will choose to raise interest rates, that is, raise the benchmark interest rate to intercept some funds of banks, that is, reduce the money supply in the market.
The first time: when the interest rate hike was announced, the price of gold rebounded directly to the bottom, forming a bottom, and there was no so-called plunge. Of course, the news that the first interest rate hike was bad for gold was digested by the market in advance after the interest rate hike last year, so the market reaction was dull when the interest rate hike news was announced.
The second time: when the interest rate hike was announced, the price of gold showed a rising and falling trend. The rise is also because the market consumed the impact of raising interest rates twice during the year (the market generally expected to raise interest rates three times this year at the end of last year), and the decline was also suppressed by the trend of shorting, which led to the daily line closing instead.
The third time: the market also began to bearish on gold, which led to the rehearsal of raising interest rates last week. Coupled with non-agricultural digestion in advance, the price of gold unilaterally stepped out of the space of more than 30 dollars.
Extended data:
Raising interest rates will generally boost the local currency exchange rate while balancing economic risks, and correspondingly, it will also affect domestic exports. Once excessive, it will lead to the risk of deflation.
The main function of raising interest rates is to prevent inflation and price rise, curb consumption, encourage residents to save and reduce speculation. Raising interest rates is an indirect means to raise the exchange rate of a country or region's monetary system (exchange rate) against other currencies.
Phoenix Net-Does the Fed's interest rate hike have an impact on the price of gold?