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Gold Investors Shouldn’t Fear Rising Interest Rates: Here’s Why

Posted on 07 August 2014

Investors commonly assume that rising interest rates adversely impact the gold price, and vise versa. They believe that a rising interest rate environment is indicative of a strong economy, which is supposed to drive investors out of gold and into the stock market. They further assume that investors will want to exchange their gold, which has no yield, for stocks and bonds, both of which have yields and generate income.
But this intuition is unfounded, at least when tracking the Fed Funds Rate since the Nixon abandoned the gold standard (i.e. after August 15th, 1971). Since then, a rising Fed Funds Rate has usually coincided with rising gold prices, and vise versa………………………………………..Full Article: Source


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VRS - who has written 38515 posts on Opalesque Commodities Briefing.


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