(Mike Maharrey, Money Metals News Service) Gold has dropped more than 11 percent from its all-time high of just over $5,102 an ounce in January, and selling pressure continues to dominate the market. A well-established mainstream narrative is driving the bearish sentiment. However, while seemingly plausible on the surface, this mainstream storyline is missing two extremely important dynamics.
According to the prevailing narrative, the Federal Reserve will have to keep interest rates higher for longer to control inflationary pressures introduced into the economy by skyrocketing oil prices due to the U.S.-Iran war. The central bank may even need to raise rates this year to combat inflation. As the mainstream analysts typically put it, “higher rates are negative for gold because it is a non-yielding asset.” In other words, since gold doesn’t pay interest or dividends, investors will spurn the yellow metal to chase increasing yields in the bond market.
Read Full Article: https://headlineusa.com/two-things-mainstream-pundits-get-wrong-in-their-current-gold-narrative/
