Gold is looking for new peaks for itself
In his latest speech, Fed Chairman Jerome Powell once again expressed a dovish stance, but it could go in either direction. As has been pointed out many times, gold appears to be very sensitive, with just the slightest impact being able to push gold prices to new record highs in any given week.
Robert Minter, Chief Strategy Officer of abrdn, said that inflation is only half the reason for this price increase, the other half is the weakness of the economy.
"There is a basis to cut interest rates in September. If you look at the current high level of consumer debt, even a little pressure on the labor market can cause serious problems for the economy. I don't think we're going to see a recession, but it all depends on the Fed. They're a little late, but it's not too late to do something."
Despite supposedly positive economic data, economic optimism seems increasingly foolish. We supposedly avoided a Volcker recession, but have we really? Or is the media downplaying how bad the real situation is? Could a devastating recession begin after the Fed starts lowering interest rates?
That's often what happens, as Ryan McMaken warns us - the reason "soft landings" are so elusive is simply because they're impossible,
"But there are two problems with the "soft landing" story: The first is that the Fed has never done this in the past 45 years. Normally, the Fed denies a recession until it happens. Then, the Fed reduces Interest rates on unemployment have begun to rise."
The market has high expectations that the Fed will reduce interest rates. The CME FedWatch tool shows an over 90% probability of this happening. According to expert Carsten Fritsch, the market is predicting that the Fed will reduce interest rates in September and may reduce it again before the end of the year.
Based on these, Fritsch thinks gold has all the elements to test and could surpass record highs this week. And all of this is still in the short term.
As we approach the end of the year, gold will exit its weakest quarter and enter the election cycle, a period that is expected to be turbulent even by the standards of the past twenty years.
The dynamics driving gold prices are changing, and investors should stay one step ahead.
In the latest report, Incrementum AG's Ronald Stoeferle notes that gold investors should pay attention to the changes driving the gold market. (This is not to say that the old factors are disappearing. Inflation and currency depreciation will still ensure gold's appeal, and any discussion of safe investments must include Yellow.)
Robert Minter, Chief Strategy Officer of abrdn, said that inflation is only half the reason for this price increase, the other half is the weakness of the economy.
"There is a basis to cut interest rates in September. If you look at the current high level of consumer debt, even a little pressure on the labor market can cause serious problems for the economy. I don't think we're going to see a recession, but it all depends on the Fed. They're a little late, but it's not too late to do something."
Despite supposedly positive economic data, economic optimism seems increasingly foolish. We supposedly avoided a Volcker recession, but have we really? Or is the media downplaying how bad the real situation is? Could a devastating recession begin after the Fed starts lowering interest rates?
That's often what happens, as Ryan McMaken warns us - the reason "soft landings" are so elusive is simply because they're impossible,
"But there are two problems with the "soft landing" story: The first is that the Fed has never done this in the past 45 years. Normally, the Fed denies a recession until it happens. Then, the Fed reduces Interest rates on unemployment have begun to rise."
The market has high expectations that the Fed will reduce interest rates. The CME FedWatch tool shows an over 90% probability of this happening. According to expert Carsten Fritsch, the market is predicting that the Fed will reduce interest rates in September and may reduce it again before the end of the year.
Based on these, Fritsch thinks gold has all the elements to test and could surpass record highs this week. And all of this is still in the short term.
As we approach the end of the year, gold will exit its weakest quarter and enter the election cycle, a period that is expected to be turbulent even by the standards of the past twenty years.
The dynamics driving gold prices are changing, and investors should stay one step ahead.
In the latest report, Incrementum AG's Ronald Stoeferle notes that gold investors should pay attention to the changes driving the gold market. (This is not to say that the old factors are disappearing. Inflation and currency depreciation will still ensure gold's appeal, and any discussion of safe investments must include Yellow.)
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