Gold Price Expected to Fall

Morningstar equity analyst Kristoffer Inton says the Federal Reserve raising interest rates does not impact the outlook for the precious metal

Morningstar Equity Analysts 25 June, 2018 | 2:44PM

gold precious metal commodity natural resources

At its June meeting, the U.S. Federal Reserve once again raised the federal-funds target rate by 25 basis points, to 1.75%-2%. In addition, the majority of officials at the central bank now expect four rate hikes in 2018, whereas at the March meeting they were evenly split between three and four hikes.

The June rate increase was largely expected by the market, as options prices implied a more than 91% probability before the announcement. The market also appears largely unfazed by an additional rate hike this year, as gold prices remained largely flat.

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Morningstar Equity Analysts  Morningstar stock and fund analysts cover 2,000 mutual funds, 2,100 equities, and 300 exchange-traded funds.

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