As the first rate hike of this new (imho very short) rate hike cycle is getting closer, let's have a look at the performance of the #USD, #commodities and #gold before and after the first hike:
Will the #USD rally? Not necessarily..
The period prior to a US tightening shows a rally in the USD but very often weakens in the 6-month period following the first hike....
The period prior to a US tightening shows a rally in the USD but very often weakens in the 6-month period following the first hike....
What about #commodities? Consensus would tell us that raising rates will cause commodities to sell off.
Not really. ..The first rate hike proved to be close to the bottom for the 2015 cycle, and all cycles were higher a couple of months out...
Not really. ..The first rate hike proved to be close to the bottom for the 2015 cycle, and all cycles were higher a couple of months out...
Now what about #gold?
Pundits would say that higher rates should cause gold to sell off, but actually the first hike seems to be a consistent point to buy gold. Only the 1994 cycle saw gold end lower than the rate hike day - and even then, it was by a small amount.
Pundits would say that higher rates should cause gold to sell off, but actually the first hike seems to be a consistent point to buy gold. Only the 1994 cycle saw gold end lower than the rate hike day - and even then, it was by a small amount.
...in the last hiking cycle, the day of the first hike exactly nailed the low in gold...
...while under Greenspan in 1999, gold made its lows only 3 weeks after the first hike and started a 12 year bull market...
Long story short: Don't fear the first rate hike, rather buy it...
ht @kevinmuir and @IGWTreport
#gold #silver #federalreserve #ratehikes #powell #trapped #BTC #USD #commodities #selltherumourbuythefact
ht @kevinmuir and @IGWTreport
#gold #silver #federalreserve #ratehikes #powell #trapped #BTC #USD #commodities #selltherumourbuythefact
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