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Rate Hikes Historically No Threat to Gold
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<p>[QUOTE="medoraman, post: 2230277, member: 26302"]I would postulate sir rate hikes in absence of any other economic news would have a negative effect on pricing. However, nothing is ever in isolation. Rate hikes should decrease interest in all non-interest bearing investments. However, many times in history rates are being hiked due to external shocks to the system, putting extreme inflation pressure to bear. I would postulate its really THOSE actions that countered the inherent negative price pressure on gold in a raising interest rate environment, enabling it to overcome what should normally be downward price pressure.</p><p><br /></p><p>If that makes sense, what investors need to ask themselves is; "Do I believe there will be external shocks in the future to enable gold to increase in a rising interest rate environment?". I cannot answer that, just ask the question.</p><p><br /></p><p>For disclosure, I have investments in stocks, farmland, housing and pm. I honestly don't know which any of them will go, so hedge my bets.[/QUOTE]</p><p><br /></p>
[QUOTE="medoraman, post: 2230277, member: 26302"]I would postulate sir rate hikes in absence of any other economic news would have a negative effect on pricing. However, nothing is ever in isolation. Rate hikes should decrease interest in all non-interest bearing investments. However, many times in history rates are being hiked due to external shocks to the system, putting extreme inflation pressure to bear. I would postulate its really THOSE actions that countered the inherent negative price pressure on gold in a raising interest rate environment, enabling it to overcome what should normally be downward price pressure. If that makes sense, what investors need to ask themselves is; "Do I believe there will be external shocks in the future to enable gold to increase in a rising interest rate environment?". I cannot answer that, just ask the question. For disclosure, I have investments in stocks, farmland, housing and pm. I honestly don't know which any of them will go, so hedge my bets.[/QUOTE]
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