Commodity Trade Mantra

Posts Tagged ‘Monetary Tightening’

Why is the Gold Market Sanguine about Rising US Interest Rates?

Why is the gold market being sanguine about rising U.S. interest rates? Rising U.S. inflation and a peak in U.S. dollar strength may mean that the traditional impact of a U.S. monetary tightening cycle may be less than usual. What the gold market is currently signalling is that while U.S. interest rate rises are still a bit of a headwind, they may not be enough to offset some compelling tailwinds.

Time to Face Reality and Invest in Gold Now

Many of the reasons behind the cheery outlook are unsound and may not come to fruition. For Trump, a loss of faith in the ability to make good on his promises would have an adverse impact on business, consumer confidence & the markets. The reasoning behind gold’s decline rests on a shaky assumptions. If things don’t go as planned, it could create uncertainty & that will benefit gold.

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