James Rickards: Gold Will Start Heading Higher On “Dwindling” Supply
By: GoldCore
GoldSeek.com
Monday, 19 June 2017
Gold was down after the Fed’s hike, but I expect it to start heading higher again. Too many powerful forces are driving it behind the scenes. Dwindling physical supply is a major one.
Gold was down after the Fed’s hike, but I expect it to start heading higher again. Too many powerful forces are driving it behind the scenes. Dwindling physical supply is a major one.
Fed policy tightening is normally a headwind for gold. But, the last two times the Fed raised rates — December 14, 2016 and March 15, 2017 — gold rallied as if on cue.
Gold is the most forward-looking of any major market. It may be the case that the gold market sees the Fed is tightening into weakness and will eventually over-tighten and cause a recession.
At that point, the Fed will pivot back to easing through forward guidance. That will result in more inflation and a weaker dollar, which is the perfect environment for gold.
In short, all signs point to higher gold prices in the months ahead based on Fed ease, geopolitical tensions, and a weaker dollar.
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