GOLD – Higher, Then Lower, Then Skyward - David Brady (10/01/2019)

Jan 10 20:01 2019 Print This Article

Jan 10, 2019

FUNDAMENTALS

The recent 20% dump in stocks triggered growing expectations

of a Fed reversal in monetary policy back to interest rate cuts and QE. To the

extent that the nascent rally in stocks since the start of the year continues,

those expectations are likely to recede and put pressure on Gold.

The Fed is “talking” dovish, but its purpose is hawkish: to

push stocks higher in order to enable further rate hikes. Higher stocks and the

increasing risk of higher interest rates are likely to weigh on Gold in the

near future.

Ultimately, the Fed will be forced to reverse policy to

avoid a collapse in stocks, which will contribute to dollar weakness,

triggering a massive rally in Gold.

U.S.-China trade talks are unlikely to be resolved

voluntarily, because President “Xi will NEVER allow the U.S. to dictate China’s

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About Article Author

Sprott Money

Established in February 2008, Sprott Money Ltd. is a leading precious metals wholesale, institutional and retail dealer selling gold, silver and platinum bars, coins and wafers online and over the phone. Sprott Money's storage program gives clients the ability to store their precious metals in multiple storage facilities located in Canada, the United States and internationally. Sprott Money Blog, which covers world events, geopolitics and of course precious metals.

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