Gold prices may be falling, but they’re not going anywhere anytime soon as investors pay little attention to the recent interest rate increase from the Federal Reserve. The Federal Reserve increased interest rates by 25 basis points, as was widely predicted. The central bank clarified that it wasn’t finished yet because inflation was still high.
Gold Holding Strong
Prices haven’t been able to break through resistance at $1,950 an ounce, which has led to some technical selling pressure in the gold market. Nevertheless, gold is still in a strong uptrend. April gold futures were last traded at $1,940.40 per ounce, which was 0.27% less than the day before.
Read More: The Fed Expects No Interest Rate Cuts in 2023
Bitcoin and Crypto Market
Even after the Federal Reserve announced that it would raise interest rates by 25 basis points, Bitcoin and the other cryptocurrency markets remained relatively stable. The move was in line with market forecasts, bringing the federal funds rate to its highest level in decades, from 4.5 to 4.75%. Stocks, shares, and cryptocurrency values have all taken a hit from the Federal Reserve’s aggressive rate hikes this year as they try to rein in record-high inflation.
Because bitcoin is a “risk-on” asset, its price has historically tracked that of the stock market. This indicates that its price may be subject to fluctuations, just like the prices of stocks. Since the Federal Reserve decided to raise interest rates, investors have been selling assets that are seen as “high risk.”
Federal Reserve Statement
“The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time,” the Federal Reserve said in a statement.
In response to the most recent statement about monetary policy, the market still thinks that rates will go up in the future. The financial markets still expect one more rate hike in March. After that, they think rates might go down before the end of the year.
