Precious metals turnaround despite Fed rate hike

The Fed is not the only bank raising interest rates. Whether gold and silver will go up in price despite the Fed decision is the big question. Certainly, investors will be looking at the Fed’s assessments of inflation and the economy in the coming months. After all, the pace of tightening is of interest. Looking at the price of gold and silver, the ratio of these two metals has reached levels not seen since the height of the pandemic. The pre-Covid high was 93.34. At 90.11 is the current ratio. If silver encounters more demand, then the ratio will fall. For several weeks, the price of silver traded between $18 and $19. There seems to be a bottom here.

While the Fed favors a so-called soft landing, given the enormous inflation, it probably makes the most sense for now to continue with aggressive rate hikes – as has happened now. Data from the U.S., which has heightened recession fears, is showing weakness right now. The Fed is also seeing the decline in commodity prices and is likely to slow the rate of increase (of interest rates) going forward. This should then add to the U.S. dollar and thus give precious metals a price boost. Now that the Fed has raised interest rates by 75 basis points, the U.S. dollar went down, as did U.S. yields. Interest rate worries went down accordingly, as did recession fears. That’s because the Fed sees a slowdown in the pace of rate hikes as possible. And a first rate cut in March 2023 is already seen as possible. So now the chances of higher precious metal prices are good. A few gold shares should not be missing in the portfolio, for example from CanaGold Resources or GCM Mining.

GCM Mining – https://www.youtube.com/watch?v=YjqrYpvif3w – will merge with Aris Gold. This will create the largest gold company in Colombia, which is also present in Guyana and Canada.

CanaGold Resources – https://www.youtube.com/watch?v=H7q_tszitZg – owns the flagship New Polaris project in Colombia, which has already produced up to 37 grams of gold per tonne of rock.

Current corporate information and press releases from GCM Mining (- https://www.resource-capital.ch/en/companies/gcm-mining-corp/ -).

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