Research on Gold Price Changes and Factors Under the Background of Fed Interest Rate Hike

Abstract

With the change of international form, the gold market is changing rapidly. In 2021, the U.S. stagflation was serious, so in 2022, the Federal Reserve adopted a series of interest rate hikes, coupled with the impact of the conflict between Russia and Ukraine. As a safe haven product, the price of gold fluctuated greatly in the short term. As an important commodity, gold is crucial to judge its price change trend. This paper mainly analyzes the U.S. monetary policy from 2022 to 2023. By studying the reasons and background of the promulgation of monetary policy, it judges the causes of the Federal Reserve's interest rate increase, and judges the background of joint inflation and regional conflict according to the international form in 2022. Combined with the change trend of gold price, it makes a joint analysis, and gets the impact trend of the Federal Reserve's interest rate increase on gold price from 2022 to 2023. Finally, it comes to the conclusion that the increase of interest rate will lead to the decline of gold price. In the early stage of interest rate increase and a large number of interest rate increases, the gold price is more affected by the increase of interest rate, so it is suitable to short gold at this time, while in the late stage of interest rate increase and the slowdown of interest rate increase policy, the gold price is more affected by other factors, so it is suitable to long gold at this time.