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.
Find out about commodities trading and learn CFD strategies at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.