What Happened to the Gold Price in March?

For months now, speculation about an upcoming rise in US interest rates has weighed on the gold price. In March, the Federal Reserve finally announced their decision to raise rates from 1.5 to 1.75 per cent. Suspicion about this move influenced the gold price in the days leading up to the announcement, as did reactions to it in the days after.

The gold price began trading on the 1st of March at £953.80. It then rose over the opening week of March, dropped through much of the rest of the month, before marking a slight upturn in the closing days of the month. The price closed on the 30th of March at £945.69.

Geopolitical tensions in China, America and North Korea

The month’s highest price was recorded on the 7th March, at £960.07, after fears of a trade war between the US and China were heightened by US President Trump’s decision to impose trade tariffs against China.

Fears of a ‘trade war’ between the two major world economies continued to bolster gold’s appeal as a safe haven commodity. Trump’s decision to meet the leader of North Korea, Kim Jong-un, further increased geopolitical tensions.

US interest rates rise

Due to the substantial effect that the American economy has over the gold price, speculation about and eventual reaction to the rising American interest rates defined the market fluctuations this month. As the date of the Federal Reserve’s decision to raise rates approached, gold fell from its heights on the 7th, hitting £950.66 on the 12th March and further plummeting to £934.59 on the 19th

After the decision was confirmed on the 21st March, however, gold showed a promising upturn. This follows a trend of gold inflating in the days after a rate hike, despite fears of the same hike having weighed down on it in the weeks and months leading up to the event.

This trend provides further evidence that gold looks set to enjoy better fortunes over the coming weeks and months than has previously been the case. If you want to find out more about these developments as they occur, stay tuned to our gold blog and make sure to check the live gold price regularly.

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