Gold Prices: High Interest Rates Ahead
The US Dollar dipped slightly Monday morning ahead of the meeting between Donald Trump and Vladimir Putin. Gold prices reacted by rising briefly, then dropping back to around Friday’s New York close. As everyone’s known about this meeting for over a week now, you’d think it wouldn’t have much of an impact, at least until one or the other of them say something new.
Interest rate speculation could be driving things this morning; it seems like every time there isn’t really anything new to talk about, interest rates pop up. Interest rates are like the future cold front of the weather world — we don’t know exactly when it’s going to get here, but when it does it will probably bring rain. And wreck your otherwise-perfect outdoor party… The next interest rate hike is probably not going to happen this July, but August-September is on the table with October being most probable.
If I were Jerome Powell I’d want to get it in sooner rather than later, and possibly delay the December rate hike to give the market a breather. After all, with recession warning signs building you don’t really want to be accused of fueling it, even if your predecessors created the eventuality with all their QE programs.