Most folks believe interest rate hikes drop the price of gold, due to investors wanting something that pays interest. But does that belief bear out over time? The answer is a resounding NO. Today’s featured article shows the historical trend of gold following a rate hike is UP, not down. This makes sense if you think of rising interest rates as a form of inflation.
In times of inflation, the price of most everything goes up. And that includes gold. So while the short-term direction may be down, given a few months we will most probably see a rise in the price of gold. And that’s without any more geopolitical events, Donald Trumps, or Spanish bank meltdowns.