Next week the Fed is expected to hike the base interest rate a quarter point. In absolute terms this is tiny, but in market terms it’s big.
Before 2008 the average for this rate was in the 3-3.5% range, and things hummed along nicely. Now just the thought of a quarter-point hike to 0.5% creates long lines at the Restart My Heart line on Wall Street.
We can expect gold prices to take a small hit as late traders do the obvious things, but in general it looks to The Gold Enthusiast that the market has already shifted away from gold and into equities. So we’re expecting a small change, not a seismic shift.