Buying Gold coz the Fed will raise rates!

Slightly weaker tone for the gold market overnight, which fell all the way down to USD $1282oz at one point, as a stronger than expected ISM non manufacturing PMI dented demand for the safe haven.

The yellow metal, which is still within touching distance of a number of key moving averages, brushed off the early weakness, and has recovered back to USD $1287oz, more or less unchanged on the day.

Equities on the other hand were weaker again overnight, with the Dow and the S&P500 easing back just under 1%, whilst Europe was marginally green.

Back to gold, and there seems a fairly even split between those expecting a breakout higher, and those expecting to see prices head back toward the USD $1200oz mark or below.

Key to these arguments has been the debate around when the Fed will start hiking rates, and the impact that will have on the gold market.

Higher rates = lower gold prices.

Its so obvious, its obviously wrong, as the saying goes, and analysts and market traders might be interested to know that gold has, on average, appreciated by 20% in the 1 year before the Fed hikes interest rates.

Seems a pretty good reason to be long if you think the Fed will hike.

More on this research here