The Federal Reserve is on track to raise interest rates later this month and tighten monetary policy through 2022. But one market strategist said that the gold market needs to be well supported in the current environment. So, what levels are expected for the gold price? cryptocoin.com We are giving the details as…
Thorsten Polleit drew attention to the importance of the Fed’s actions
Thorsten Polleit, Degussa’s chief economist, reiterated his call for the Fed to only make “cosmetic” interest rate adjustments and stay well behind the inflation curve. According to the expert, the Fed just wants to keep the expectation that everything is under control alive. He says that if the US Federal Reserve (FED) tries to prevent inflation and real rates turn positive, credit markets may collapse and paper money may be put at risk.
He added that the current environment is pushing the Federal Reserve’s hand and it has no choice but to raise interest rates. In his testimony on Capitol Hill on Wednesday, Fed Chairman Jerome Powell stated that the central bank is on track to raise interest rates.
Degussa Economist: Gold price will break record against US dollar
As for where gold fits, Polleit said it remains the most attractive asset to have in the current environment. He pointed out that rising interest rates and high inflation will create volatility in the stock markets. He added that investors will continue to switch to gold as they try to maintain their purchasing power. “Gold not only protects you against currency declines, it also provides a return on your investment,” he said. Polleit said that over the past 20 years, gold has outperformed equity markets, yielding an average annual return of 8.5 percent.
As investors focus on what the Fed will do in the next two weeks, Polleit said gold has become a key global asset. Late last month, gold prices soared to a record high against the Japanese yen. Gold rose to a record high against the euro as Russia invaded Ukraine. According to the expert, the US dollar is the world’s most important safe-haven currency, but there is another option, gold. Polleit said he expects gold prices to return to a record high against the US dollar this year.
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