Next Gold Price Jump; Look For These Signs
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(Kitco News) - Chances are skewed in gold’s favor, as it is more likely than not that the Fed will maintain their dovish stance, this according to Will Rhind, CEO of GraniteShares.
“The expectations, in terms of the market right now, are so overwhelmingly for a rate cut that we have, right now from a probabilities perspective, more chance of rates going to zero than we do one hike in the market,” Rhind told Kitco News. “So, at the moment, you’ve got real interest rates coming down, or expectations of real interest rates coming down and that’s always a positive to gold.”
Rhind noted that aside from the Fed, the U.S. dollar still has the most weight on the gold price direction.
“The overwhelming factor here is the dollar and the interest rates and particularly real interest rates. That’s one of the best correlations or relationships that we have, in terms of real interest rates and gold, and so if you see real interest rates coming down, the opportunity cost obviously of holding a zero-interest rate asset like gold diminishes, and that’s positive for gold,” he said.