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Let us be blunt for a moment: interest rate hikes by central banks, especially the Fed, are generally bad news for precious metals. Or better said: a greater number of rate hikes than the market currently expects, mean bad news for precious metals prices. Whoever bases his or her expectations on what the Fed casually promises between lines, is assuming that the central bank based in New York will raise the official rate once more this year and another three times in the course of next year.

If this pans out to be right, then between now and New Year’s Eve 2018 we will have a total of four more rate hikes. In that case, it would not surprise if precious metals will encounter some headwinds from that direction. However, in case there will be less than four rate hikes in that period, do not be caught by surprise if precious metals continue to rally.

Now that we have established this fact: how can we reasonably assess what the Fed will do in the coming quarters? The odds are high that next month, September, will be extremely important in that regard. Here is why.

Inflation, Inflation, Inflation

THE US inflation rate has ALREADY been on the decline for some time now, Source: ST. LOUIS FED

Jobs, Jobs, Jobs

THE US LABOR market is strong, WILL it REMAIN STRONG IN THE NEAR FUTURE? SOURCE: ST. LOUIS FED

Meanwhile in the Eurozone …

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