Rising interest rates bullish for gold

Data may show today that U.S. inflation held at the fastest pace since October 2012, putting pressure on the Federal Reserve to tighten monetary policy.

Rising interest rates will be bearish for stocks, bonds and property. They are likely to be bullish for gold.

This was seen clearly in the 1970s when rising interest rates were negative for stocks and bonds but positive for gold. It is toward the end of the interest rate tightening cycle that gold will be vulnerable to falling when depositors are again incentivised to save through positive real interest rates.

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