“I hope all gold investors out there fasten their seat belts,” said market expert Neils Christensen.
“Gold is more than just a hedge against inflation”
As the Federal Reserve hawkishly paved the way for a rate hike in March and plans to shrink its bloated balance sheet before the end of the year, the expert says the golden bulls are once again backing down. According to the expert, the Fed has laid the groundwork and it doesn’t look like the markets have started building a flimsy house of cards on top of it. Markets are now pricing in five possible rate hikes this year and a 50 basis point move potential in March. Some economists and analysts worry that aggressive tightening could stifle economic growth this year. Paul Ashworth, chief US economist at Capital Economics, comments:
Jerome Powell fueled Ratemaggedon fears with a hawkish performance at the press conference. But even with both wage and core price inflation hovering at 40-year highs, we suspect this year’s disappointing real economic growth will limit the Fed to 100 basis points of tightening.
cryptocoin.com As we reported, the precious metal has taken a big hit, down nearly 3% since Wednesday’s monetary policy meeting, while many commodity analysts are not ready to give up on the precious metal. Many analysts point out that gold isn’t just a hedge against inflation, the latest PCE data is running at a 40-year high. Neils Christensen also notes that it’s more of a hedge against a shaky stock market and now insurance against a ‘policy error’ from the Fed:
We can see how robust the gold market is. It is more than the sum of the ETF market. On Thursday, the World Gold Council reported that demand for gold rose 10% last year, despite depressing investor demand for gold-backed exchange-traded products.
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