Confusion Over the Fed Has Gold Soaring
Why market confusion is great for gold
The will-they/won’t-they guessing about the Fed’s next step toward raising interest rates has been annoying regular investors and Wall Street alike. With multiple rate hikes predicted this year, but no actual hikes yet (the last one was last December), the market is drooping, and the dollar’s value lessening.
But good news --gold is at a two-week high.
The price of gold slid in May as belief that the interest rates would hike were high, but when the jobs report for May came out last week, many were shocked by the amount of jobs added --38,000-- instead of the expected 164,000. The rate hike is often dependent on the economic growth and job stability, and the jobs report did not show either.
No Rate Hike, Gold Hike
Now most believe that the June rate hike that everyone thought very likely in April, is impossible, with only 26% thinking it likely they raise rates in July. And when rates don’t rise, gold does.
Essentially when the dollar doesn’t look hot, and the United States economy shows warning signs of a recession, people want to invest their money into something that always has value -- gold.
With a 17% rise in the price of gold since January, and prices near $1,250 an ounce, gold investors are gearing up for a solid year of prices rising. Gold companies that own mines are also looking into expanding their operations, a sure sign that gold is on the rise.
Anytime the traditional stock markets go down, gold goes up. And with nervousness about the U.K.’s referendum on whether or not to stay in the EU, prices are predicted to keep rising all over the world.
If the Fed keeps printing money, then gold should continue to climb and gold investors will continue to get a solid return on their investments.
To continue reading about gold’s rise, click here.
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