Gold has been on the up this week. Two forces in its favour have been a declining USD, and weaker investor sentiments sorrounding Fed policies.
The threat of interest rate increases has somewhat subsided recently. Gold has continued to move up in COMEX markets, almost as if out-of-sync with commentary from the Federal Reserve. As noted in other articles, higher interest rates are a threat for precious metals. This is because they increase the opportunity cost of holding, for example, gold.
September 20th – Mark the Date
It is unlikely, however, that we will see much volatility from gold buyers or gold sellers until September 20th Fed meeting ends, and more definitive news is released. With that in mind, gold is always apt to surprise. In fact, greater stock-market volatility may well increase demand for gold, a traditionally ‘stable’ asset.