Precious metals traded lower this spring as investors worried about the potential for interest rates to rise later in the year. After an unprecedented period in which the Federal Reserve has kept interest rates near zero and spent billions of dollars per month buying Treasury bonds, it is now making a calculated exit from its bond-buying program. #-ad_banner-#For investors in gold, one of the primary fears is that the Fed will allow interest rates to rise, which in turn, would lead to a stronger U.S. dollar. As a general rule, gold prices fall when the dollar is rising because a… Read More
Precious metals traded lower this spring as investors worried about the potential for interest rates to rise later in the year. After an unprecedented period in which the Federal Reserve has kept interest rates near zero and spent billions of dollars per month buying Treasury bonds, it is now making a calculated exit from its bond-buying program. #-ad_banner-#For investors in gold, one of the primary fears is that the Fed will allow interest rates to rise, which in turn, would lead to a stronger U.S. dollar. As a general rule, gold prices fall when the dollar is rising because a stronger dollar can buy more ounces of gold for less. Last week, the Federal Reserve completed its scheduled meeting, and as expected, announced a fifth straight $10 billion cut in its monthly bond-buying program. While these cuts are widely expected to be bullish for the U.S. dollar, the Fed also issued a statement noting that it intended to keep the short-term interbank lending rate in a range of zero to 0.25% “for a considerable time after the asset purchase program ends.” Prices for precious metals jumped on the announcement as it is becoming clear that the Fed will continue to… Read More