The Fed

It is a bear season in the stockmarket and gold miners are prospering. The possible US recession is the most probable main driver. Gold is seen as the best hedge against both the US recession and the US dollar currency weakness. Gold has returned a neat 20 percent return compared to the S&P which has declined 12 percent. Market commentators relate the current action in the market to what happened during 1979-80, when gold prices trebled within a matter of few weeks. A Fed Reserve rate cut would surely propel gold to new high price levels.

So the market has got what it has been waiting for. And how did it react?

Watching and waiting. But while waiting I've taken advantage of this recent volatility to make some profits. The recent volatility in stock prices and foreign exchange rates worldwide is simply waiting for one number. The US interest rates. Currently the interest rate stands at 5 per cent. The Federal Open Market Committee (FOMC) from the Federal Reserve in the USA will determine whether or not to raise rates at their two-day meeting, ending June 29.

The US Fed Reserve has raised interest rates for the 14th time by 25 points to 4.5 per cent. The Fed has also signaled that there is a prospect for further rate hikes to come. It was the final meeting with Greenspan who is 79 and retiring as chairman after 18 years. The new chairman is the US Senate voted White House economic advisor Ben Bernanke.

"Although recent economic data have been uneven, the expansion in economic activity appears solid," the FOMC said in a statement.

The US Federal Reserve overnight lifted US borrowing costs for the 13th time running but signalled a possible end to its campaign of rate hikes as chairman Alan Greenspan prepares to retire.

As expected, the US central bank raised the benchmark interest rate paid by banks on overnight loans by a quarter point to 4.25 percent. The rate steers lending costs throughout the world's biggest economy.

But a