After months of deliberation the Federal Reserve decided not to raise interest rates. The Fed cited weakness in the global economy and lower than expected inflation as the main drivers behind their decision. Immediately following the announcement the U.S. dollar fell and the gold price rose to £726 per ounce.
Interest rates in the U.S. has now been at zero since December 2008 and many are beginning to doubt if the Fed will ever raise rates. Instead many are anticipating further easing in the form of negative rates or a fourth round of quantitative easing.
European stock markets have reacted negatively to the news with the majority of indices in negative terrority.
The Fed has once again kicked the can down the road and they run the risk of losing the confidence of the market if they don’t raise rates soon.
Gold is currently trading at £729.69 per ounce, silver £9.74 per ounce, platinum £630.44 per ounce and palladium £390.02 per ounce.