Tag Archive: tightening cycle

No Shortage of Bullish Catalysts

The gold market has shown some significant upside in recent months, and with good reason. There are a variety of issues currently working in gold’s favor, and a strong fundamental and technical backdrop could keep the metal on the offensive. Regardless of whether the Fed cuts rates further or how much, the current state of the global economy and geopolitical landscape could be supportive for the metal and other hard assets. Here are three issues that may make now the ideal time to build a... Continue Reading

Buy the Rumor Sell the Fact?

This week, the scheduled Federal Reserve policy meeting is likely to dominate much of the financial headlines. The Fed will be meeting Tuesday and Wednesday, and is expected to hike interest rates again by another 25 bps. Investors will likely be far more focused on the central bank’s plans going forward, however. Right now, the Fed has another 25 bps hike penciled in for November. Although traders are widely expecting action again before the end of the year, there is also a possibility that the... Continue Reading

Rates May Go Up Only to Come Right Back Down

With the U.S. and global economies on more solid footing, the Fed has been raising interest rates as it attempts to normalize monetary policy. Other central banks, such as the ECB, are also looking to end stimulus measures and begin the process of removing monetary stimulus through low rates, QE or both. As central banks remove the punchbowl, however, markets will be left to stand on their own two feet. This could be compared to stock markets continuing to play the game, but now without... Continue Reading

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Don’t Fear Higher Rates, Welcome Them

The U.S. Federal Reserve elected to hold rates steady at its latest policy meeting on Wednesday. This move came as no surprise. The Fed also discussed how it sees the need for gradual hikes going forward, which is also not very newsworthy. Many investors, however, seem to misinterpret what higher rates really mean for the markets. Gold is a common object of discussion when it comes to higher interest rates. The theory, among some investors and some financial “experts” goes something like this: Higher rates... Continue Reading

A Different Perspective on Risk

Risk and control of it is perhaps the single most important theme for investment success. Without risk, there can be no reward. On the other hand, too much risk can easily wipe out any gains-and more-sending the investor back to square or worse. Like any other issue, risk should also be kept in the proper perspective. Given all of the recent coverage of rising interest rates, it seemed like a prudent time to talk a bit about rate risk as it pertains to gold. It... Continue Reading

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Yellen Comments Deemed Dovish

In what may be the most significant commentary of the week, Fed Chairwoman Janet Yellen’s prepared remarks have been released ahead of her testimony before the House Financial Services Committee today. Ms. Yellen alluded to the pace of further rate hikes being very gradual, and it seems that rates will not reach levels seen in previous tightening cycles. Investors will be paying close attention to her commentary before the committee later today, as well as to the Q&A session to follow. You have to wonder... Continue Reading