Gold price 8216 not controlled by Fed 8217

A new report from the World Gold Council has explained gold prices.


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By :  ,  Financial Analyst

The World Gold Council (WGC) has stated that the value of gold is not controlled by the Federal Reserve and investors should not be concerned by the organisation's activity.

Comments made by chairman of the Fed Ben Bernanke have had a major impact on the commodity's price in recent weeks, but the body stated that this does not need to be the case.

Its latest research paper – Gold and the US interest rates: a reality check – admitted that negative interest rates support gold investment demand and as a result, rising rates increase the cost of investing in the precious metal.

The WGC said: "A normal rate environment – with real interest rates ranging between zero per cent and four per cent or approximately 2.5 per cent to 6.5 per cent in nominal terms – is not automatically adverse to gold."

It went on to note that in a situation such as this, buying gold is usually beneficial for investors.

According to a recent report by The Week, gold prices in India are set to rise as a result of a move by the Reserve Bank of India.

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