The first negative inflation reading in more than four years, as well as dovish testimony from Federal Reserve Chairman Powell, has fueled speculation that the Federal Reserve will cut interest rates sooner than previously expected. This speculation has, in turn, boosted the appeal of non-interest-bearing assets like physical gold.
“The fundamentals have clearly shifted to offer investors increased reasons to re-weight gold holdings in the portfolio, and this has led to price-sensitive funds chasing the upside. With broad-based positioning and sentiment not near extremes, $2,500 could well be tested soon enough.”
—Chris Weston, head of research at Pepperstone Group Ltd.
Why have interest rate cuts fueled gold prices, and what else has fueled the precious metal’s rise?
Click on the video link below for exclusive executive insights on this topic from Philip N. Diehl, 35th Director of the U.S. Mint and President of U.S. Money Reserve.
Related headlines from around the web:
- CNBC: “Inflation falls 0.1% in June from prior month, helping case for lower rates”
- Bloomberg: “Fed Prepares for September Cut as Powell Shifts Focus to Jobs”
- MarketWatch: “Why gold prices look likely to smash more records”
Enhance your portfolio with precious metals today.
Widespread market forces like central bank demand, geopolitical tensions, and monetary policy may continue to drive gold prices higher. Gold has also historically been used as a hedge against economic uncertainty and market turbulence. Now may be the perfect time to add wealth protection to your portfolio in the form of physical gold.
Watch U.S. Money Reserve’s “Market Insider” each week for more economic insights. Nothing herein should be considered as portfolio or retirement advice as U.S. Money Reserve (“USMR”) cannot and does not offer financial advice. Clients should consult a financial advisor for specific advice. This commentary is provided by USMR for informational purposes only and is provided on an “as is” basis without any warranty of any kind, whether express or implied. Your use of the information provided in this commentary is entirely at your own risk. In no event will USMR be held liable for any indirect, special, incidental, or consequential damages arising from the use of information contained in this commentary.
