Gold spikes one week after Fed rate hike - Swissquote

Yann Quelenn, market analyst at Swissquote Bank, says that gold is surging a week following the Fed’s rate hike. This flies in the face of the conventional way of thinking that gold should take a hit on the back of increased rates. Last week, the metal was struggling and took a hit but this week, it is largely recovering. Why?

Key quotes

"It is clear to us that markets were overly optimistic about Trump's election and almost naive concerning the promised massive fiscal and spending plan. Now markets fears have come flooding back with no one really knowing what the outcome of Trump’s presidency will truly be. The stock market has even begun to correct with the S&P losing almost 30 points, dropping to 2344 yesterday as the Trump administration desperately scrambles to pull together a plan to deliver its program." 

"Interestingly, though interest rates remain very low in the US, this is a trend we are seeing the world over. This is likely because markets are holding out for more insight on Trump’s next moves before selling back their gold. If this is the case, then gold's rise is far from over."