Where is gold’s turning point? [Video]
|The latest move by the Federal Reserve has affirmed that tackling inflation is the number one priority of the Federal Reserve, even if it means bringing the US into what’s called a ‘hard’ landing. A hard landing is when growth is hindered so badly by rising interest rates that the economy comes to a sudden and abrupt halt as debt repayments increase, mortgage payments rise, property valuations sink, and stocks slide rapidly lower.
One commodity that is touted as a stagflation hedge is gold, but the surge in real yields and the USD has kept gold, silver, and platinum pressured. Nevertheless, gold can potentially gain in the stagflation environment.
How can seasonals potentially help you with timing your entries? Over the last 25 years, from the end of September to the start of December, gold has shown a mixed seasonal pattern. However, if we look at this pattern from December 24 to February 20 we can see that gold may show a positive outlook at this time of the year.
Major trade risks: If the USD and real yields stay firm then gold can continue to track lower despite its seasonal pattern.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.