We continue to believe that a Powell-led Fed will stay cautious on raising rates. The economic outlook is far from clear, though the obvious intent is try to jump-start inflation. The problem with inflation – as most of the historical examples tell us – is that things can seem very quiet for awhile then get very noisy in a hurry.
With respect to gold, the latest revelations of Fed group think in and of themselves are not likely to send demand on a tear, but it could allow for a steady increase in interest, and perhaps, even price appreciation over time, though I hesitate to say such a thing [smile]. There are, at the same time, a number of other potential incentives for gold to attract investor/speculator interest on a short term basis outside the effects of Fed policy – like the geopolitical situation, for one; bond and stock market concerns for another.
We believe the important point to consider from a gold perspective is that the Fed is flashing all sorts of signals that its policy is going to be more passive in nature. . . . .The markets, including the international gold market, will need to figure out what that might mean. For the owners of physical metal, time is on our side.