• 19 hours Three Energy Casualties In The Coronavirus Crisis
  • 2 days Markets Crumble As Coronavirus Panic Peaks
  • 2 days Cobalt May Be The Key To Clean Hydrogen Fuel
  • 4 days How Taxpayers Are Bankrolling The EV Revolution
  • 5 days The Coronavirus Is Crushing China’s Car Market
  • 6 days Fighting For Survival In The Streaming War
  • 7 days Want A Job? Forget About A Bachelor’s Degree
  • 7 days Another Major Car Maker Is Backing Hydrogen
  • 8 days Are Americans Finally Sold On Soccer?
  • 8 days Is The Tech Bubble About To Burst?
  • 9 days Coronavirus Could Cost Tourism Industry $80 Billion
  • 9 days What Web Traffic Trends Can Tell Us About The World
  • 9 days Miners Face Greater Headwinds
  • 10 days Boris Johnson Proposes Billion Dollar Bridge To Northern Ireland
  • 11 days Goldman Slashes Oil Price Forecast By $10
  • 12 days Tesla Raises $2 Billion In Share Selloff
  • 13 days What The T-Mobile Takeover Of Sprint Really Means For Markets
  • 13 days The U.S. Has Charged Huawei With Racketeering And Conspiracy
  • 13 days How Hydrogen Could Become The Fuel Of The Future
  • 14 days Millennials Can’t Retire, But They’ll Still Have To Help Their Parents
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Peter Schiff

Peter Schiff

Schiff Gold

Peter Schiff is an economist and investment advisor specializing in the foreign equity, currency, and gold markets. He became internationally known by successfully forecasting the…

Contact Author

  1. Home
  2. Markets
  3. Other

2016 Forecast: An About-Face for the Fed and Gold

Synopsis: The Federal Reserve's December interest rate hike was actually the end of the Fed's tightening cycle that began with the first taper talk several years ago. The Fed will be forced to restart QE and lower interest rates again (maybe even into negative territory) when it becomes clear the US economy is sliding back into recession. When that happens, investors who have been selling gold on expectations of economic health will have to reverse their bets and begin buying as gold rallies.

0:20 - In 2015, the Fed wanted to have its rate-hike cake and eat it too by talking about raising interest rates, but not actually doing it.

0:50 - By December, the Fed had backed itself into a credibility corner. It had no choice but to raise rates to prove it had confidence in the economy and the markets.

1:30 - Since the rate hike, the air is already coming out of the bubble.

2:20 - The Atlanta Fed's estimate for fourth-quarter GDP is just 0.8%. It's possible that number could be negative by the time it's revised.

3:00 - The Fed just blessed the health of the economy, so how will it execute an about-face and maintain its credibility?

3:45 - What does this mean to the price of gold?

4:30 - The first rate hike in December was not the beginning of the tightening cycle.

5:10 - The rally in gold that began when the Fed hiked rates is going to continue and accelerate.

5:45 - Gold is still an incredible buy, because most people are still wedded to the narrative of an economic recovery.

6:30 - The Fed will have to return with quantitative easing, which will trigger the mother of all rallies in gold as investors quickly reverse their bets.

7:35 - Silver is also still very cheap. If the price of gold goes up, then the price of silver is going to go up even more.

 

Back to homepage

Leave a comment

Leave a comment