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Silver and Gold are Looking Good in 2019 - w/ Peter Hug

Commentaries & Views

Precious metals will likely rally on the back of a weaker dollar in the first half of 2019, owing to higher interest rates in Europe, this according to Peter Hug, Global Trading Director of Kitco Metals.

“Looking forward, I’m a little concerned now that almost every analyst you speak to believe the Fed is not going to move in 2019. Some are even taking the December rate increase that is expected next week off the table. We think the Fed does go in December. I think from a view perspective, if the Fed does not raise in December, I think it’s going to send the wrong signal to the market that they’re worried, so I think the Fed goes a quarter point next week,” Hug said.

As the Fed will keep rate hikes on pause in the first six months of 2019, the European Central Bank will likely begin monetary tightening of their own, and interest rate differentials will contribute to a lower dollar, Hug said.

“We think they’re going to be on hold possibly for at least six months in 2019. Now in that context, we think if the Europeans follow through on what their mandate is for 2019 when they are going to start normalizing rates, we think that will be negative for the dollar, and price positive for the metals,” he said.

Hug added that while he is bullish both gold and silver, he believes that silver will outperform because, on a percentage basis, it has more room to rally.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.