Why Jim Rickards Thinks The Fed Will Ease Next Year

As markets digest last week’s move by the Federal Reserve to raise interest rates for the first time in almost a decade, one bestselling author says it was a ‘huge mistake,’ and once the central bank realizes it, gold should benefit. Giving his market outlook for 2016, Jim Rickards told Kitco News he expects gold prices to recover during the second half of the year. 'For the next 6 months, I think it’ll be a bit of a tough road for gold,’ he said. According to Rickards, Fed tightening will put pressure on gold prices, but eventually the central bank will need to turn the corner. 'They had to do it before the end of the year or they would have lost all credibility,’ he said. 'When even the Fed realizes how weak the economy is, they’ll have to ease. I expect Fed ease by end of 2016.’ Looking at divergent central bank policies globally, Rickards pointed out that the strong dollar is hurting the U.S. economy and the country has now 'become a sponge for all the deflation in the world.’ Rickards did note that regardless of what happens to the gold price and the U.S. dollar, investors should maintain at least a 10% stake in gold, especially in the 21st century. 'You want non-digital assets. Gold is a non-digital asset; you can’t hack it, you can’t erase it.’ Kitco News, December 21, 2015. (show less)

As markets digest last week’s move by the Federal Reserve to raise interest rates for the first time in almost a decade, one bestselling author says it was a ‘huge mistake,’ and once the central bank realizes it, gold should benefit. Giving his market outlook for 2016, Jim Rickards told Kitco News he expects gold prices to recover during the second half of the year. 'For the next 6 months, I think it’ll be a bit of a tough road for gold,’ he said. According to ... (read more)

Disclaimer: The content on this website, including, without limitation, news, videos, interviews and commentaries, is provided by Kitco Metals Inc. ("Kitco") for informational purposes only and is not intended as any form of advice, whether legal, accounting, investment, financial or tax advice. Therefore, it cannot be relied upon as such. Should you require such advice, contact a licensed professional. The content provided herein is provided on an "as is" basis without any warranty of any kind, whether express or implied and your use of the information provided in said content is entirely at your own risk. In no event will Kitco be held liable for any indirect, special, incidental, or consequential damages arising out of the use of the content on this website.