Gold’s luck to run out

The price of gold was largely unaffected by the Fed’s decision to raise its policy rate target by 25bp, to between 1.00% and 1.25%, yesterday. While many have attributed the resilience in the gold price to strong safe-haven demand, there is little evidence to support this view. Instead, we think that the price of the yellow metal will fall in the remainder of the year as the Fed hikes rates by more than the market currently anticipates and global risks fade.