after a year and a half of regular interest rate increases. Will the trend continue after the Fed's pause? We asked the experts.
"There is a case to be made that this would be bullish for gold prices," says Doug Carey, CFA and president and owner of WealthTrace."Historically, there has been an inverse relationship between interest rates and the price of gold. When interest rates rise, the opportunity cost of holding non-interest-bearing assets like gold increases.
"This means that as interest rates go up, investors might be more inclined to invest in interest-bearing assets like bonds or savings accounts, which can provide a reasonable return on their investment. As a result, the demand for gold, which doesn't offer interest or dividends, tends to decrease, putting downward pressure on its price. On the flip side, a pause or decrease in rates can bode well for gold prices as more investors get out of bonds and cash and move into gold.