The gold price has risen significantly in late trading today after an interest rate hike from the US Federal Reserve, followed by a less than bullish monetary statement.

At 7.28pm (GMT) gold was trading at $1,216 up from $1,198 in yesterday’s trading.

Although most analysts widely expected the Fed to raise, a bullish monetary statement including the timing of another rate rise was also expected, and when that didn’t eventuate the gold price surged.

The Fed instead played the situation very cautiously and noted that although they expect rise rates further this year, external factors and local economic data will play an important part and they couldn’t commit to a date of further rate rises,

The Federal Open Market Committee is “saying that it will be slow and steady with rate rises, the Fed will not want to jeopardize their beloved, much awaited inflation which is picking up, by raising rates too quickly.” said Peter Spina, president of GoldSeek.com.

“With gold pricing in this rate rise and tilted toward more aggressive or a surprise upside, [that] will keep the price well supported around $1,200 with the possibility of a short-term run toward $1,225-$1,240,” he added.

Mr Spina also noted that the gold price could rise by as much as $200 as the year unfolds if the Fed drags their feet on raising rates,

“if the market does not believe that the Fed will more slowly lift rates and senses a limit to where they can raise rates, they will set off a larger gold rally that could send it much higher later this year, possibly $1,400 to $1,500, he said. After today’s dovish FOMC meeting, this scenario is growing in probability.” He said.

“if the market does not believe that the Fed will more slowly lift rates and senses a limit to where they can raise rates, they will set off a larger gold rally that could send it much higher later this year, possibly $1,400 to $1,500, he said. After today’s dovish FOMC meeting, this scenario is growing in probability.” He said.