Gold Performance & Rate Increases?

This article suggests that historically (with a few exceptions) there has been a direct correlation between the Feds raising the interest rates and the price of gold going up.  Since gold has been taking a real drubbing the past several years, perhaps with the Fed planning to raise interest rates later this year, the time has come to start rethinking investing in gold.  After all, can it really go much lower?  Time will tell.

Gold Performance & Rate Increases?

by Admin Tim - July 31st, 2015, 9:30am

Interesting few examples from the past showing Gold benefitting from rate increases, as per a report by HSBC’s FX strategist, David Bloom.

A few caveats: Rate increases typically occurred during periods of elevated inflation, and during currency fluctuation, especially a weak dollar. At present, we have deflation, and the dollar is at 12 year highs. Traders are urged to be careful drawing any conclusions from any one single variable.

Except for 2004, it looks like the Fed follows gold, and not vice versa.

Gold Performance & Rate Increases? | The Big Picture