Gold to 3-Week High After Fed Decision

gold rising

As we close the chapter on 2021, we look ahead to 2022 and all that may be in store for us.

All things considered (at least up until Thanksgiving), many Americans assumed we would be off to a solid start in the new year.

Then, the latest Covid variant Omicron emerged and evidently caused the world to hit the “reset” button yet once again on our economic recovery process.

Then came the news of The Federal Reserve’s decision to begin increasing interest rates, something they promised not to do until we showed clear signs of recovery from the pandemic.

Traditionally, interest rate hikes by the Fed would act as a bullish signal to investors as it essentially says the Fed feels the market is strong enough to absorb the increases.

However, in the case of gold in December when the Fed made its announcement, it climbed to reach a three-week high.

Inflation is running at its fastest rate in nearly 40 years and the economy is bracing itself for the Federal Reserve’s first rate hike that could be coming as early as the next few months.

“Despite the hawkish Fed, the U.S. dollar index dipped and gold prices edged higher,” said Naeem Aslam, chief market analyst at AvaTrade, in a daily research note.

The reaction of the markets left many confused, yet some experts believed to have found the solution.

Analysts believe gold is receiving its support from hedging the economic risks surrounding the spread of the Omicron variant.

Several countries have already imposed nationwide lockdowns and unfortunately, some analysts also believe the impact of Omicron will be mostly felt on the inflationary side and on economic recovery.

This major setback leaves everything up in the air again. There’s no telling just how high inflation will keep soaring.

Combined with supply chain issues, the significant labor shortage, it’s not hard to understand why the question remains, when will the pandemic mania end and when will we be able to resume our normal lives?

An even more significant thought is– what will happen to our life savings in the meantime?

While no one can be certain of that answer, proactiveness in like situations is vital.

What have you done to prepare for 2022 financially?

If you’re ready to take control of your financial future, call American Hartford Gold at 800-462-0071; we can help.

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