As global equity markets tumble, many analysts say it could be time for gold to shine once more as a safe buy in times of market turmoil. Spot gold prices are hovering just below $1100.00 per troy ounce as I write this, reflecting a modest 1% increase since January 1st. However, that 1% increase would look extremely appealing to those holding equity based portfolios. Gold prices recently topped $1100.00 for the first time in over two months as the dollar fell in response to concerns over both the Chinese economy and weaknesses within our own economy.
As many of you are well aware the Federal Reserve did as many expected on December 16, 2015, raising its key rate by .25% and announcing it will slowly raise rates over the next few years. Here at Jack Hunt’s we observed a noteworthy uptick in bullion sales in the days immediately following this announcement. With that in mind I’ll offer a few thoughts on the implications of this and future rate hikes and the rationale behind the Feds decision. Although I won’t predict what these higher rates mean for the short or long term price of Gold, I hope you’ll conclude after reading this that precious metals deserve a more prominent place in your portfolio.