Many investors believe that the rise of the federal funds rate is detrimental for gold prices but, although this relationship may often hold, investors should be skeptical about this rule of thumb. This article explains why that is the case.
Read More »Search Results for: interest rates
Don’t Fear End of QE or Beginning of Higher Interest Rates – Here’s Why (+2K Views)
The Fed and the bond market are responding appropriately to declining risk aversion and a somewhat improved economic outlook. There is no reason to fear the end of QE or the beginning of higher short-term interest rates. Let me explain further.
Read More »This Post On Interest Rates Is Too Important To Ignore – So Don’t!
Most of the hundreds of financial articles posted every week are just "financial entertainment" - unfounded forecasts, fear mongering or cheer-leading. That being said, there are a number of articles that are absolutely MUST READS if you want to become an informed investor and be in position to understand what is evolving in the financial environment and be in a position act accordingly. Here they are.
Read More »It’s Imperative That You Know ALL About Interest Rates! Here’s Why & How To Do So
I read hundreds of financial articles every week and most are nothing more than "financial entertainment" - unfounded forecasts, fear mongering or cheer-leading. That being said, there are a number of articles that are absolutely MUST READS if you are to become an informed investor and be in position to understand what is evolving in the financial environment and act accordingly. Introductory paragraphs and links to a number of them are provided in this post.
Read More »What Do Current Low Interest Rates Mean For the Future Price of Gold? (+3K Views)
Investors commonly assume that rising interest rates adversely impact the gold price, and vise versa. They believe that a rising interest rate environment is indicative of a strong economy, which is supposed to drive investors out of gold and into the stock market. They further assume that investors will want to exchange their gold, which has no yield, for stocks and bonds, both of which have yields and generate income but this intuition is unfounded. Let me explain why that is the case ans why, as such, gold investors shouldn't fear rising interest rates.
Read More »What Affect Will Rising Interest Rates Have On Inflation & the Future Price of Gold?
Though the stock, bond and currency markets, at the moment, are preoccupied with the question of when the first interest-rate increase will happen, the real story lies in where interest rates are ultimately headed because that answer defines where stock, bond and currency prices are ultimately headed and the reality, dear reader, is that the Fed simply cannot — and will not — allow interest rates to crawl very high. Why is that you ask? Read on!
Read More »Interest Rates Play A MAJOR Role In the Behavior Of the Stock Market – Here’s Why
To understand how the stock market behaves it is imperative to realize that the stock market is overwhelmingly influenced by interest rates. It’s difficult to overstate this key fact. Interest rates are the bone and marrow of the stock market. More specifically, the stock market is ruled by long-term and short-term interest rates creating an overriding framework for what drives the market in which different sectors do better or worse at different points in the economic cycle. This article explains the behavior more fully.
Read More »What Does the “Market Map Model” Say About Future Direction Of U.S. Stocks, Interest Rates & Commodities?
If the past long-term cyclical correlations between interest rates, equities, and commodities were to play out as they have done going back to the 1880s, U.S. stocks and interest rates should continue to rise as commodities either fall or underperform according to a 60-year cyclical pattern model referred to as The Market Map.
Read More »What Does Current Money Velocity Say About A Future Rise In Interest Rates?
With all of the things in the world to worry about, how much should we worry about a sudden sharp increase in UST yields? The short answer is not much and here is why.
Read More »Goldbugs Should Pray for Higher Interest Rates – Here’s Why
Interest rates cannot stay low forever so, while the Fed’s low interest rate policy is pushing stock and bond prices higher, it is also infusing potential energy into the gold market. Therefore, it is only a matter of “When?” and not “If?” this trend reverses and gold catapults higher.
Read More »