According to a gold strategist, the precious metal has nothing to fear from the Fed even as the central bank raises interest rates by 50 basis points and signals more aggressive moves in the next two meetings. Here are the details…
Milling-Stanley has announced the range it expects for gold
George Milling-Stanley, chief gold strategist at State Street Global Advisors, said that gold prices will stay at 1,800 for the rest of the year. He said he expects it to continue trading between $2,000 and $2,000. The US Federal Reserve (FED) continues to fight inflation with aggressively tighter monetary policies. Although the US central bank has signaled that it may raise interest rates by 50 basis points in the next two meetings, as we reported on Kriptokoin.com , Fed Chairman Jerome Powell rejected the idea that he could raise interest rates by 75 basis points. The market had to adjust some of its hawkish expectations, which helped gold prices briefly push above $1,900 an ounce.
Milling-Stanley said, “Mr. Powell provided excellent direction to the market to avoid market shocks and surprises.” “He handed over the post of a Fed Chairman at this private meeting,” he said. Although gold faced a pretty strong resistance at $1,900, Milling-Stanley said the market remained solid. “As I said before, gold has nothing to fear from rising interest rates. But stock markets are a different story. “They will have something to fear from higher interest rates,” he said.
Geopolitical uncertainty persists
Rising interest rates as well as rising economic threats and ongoing geopolitical uncertainty in Milling-Stanley, China and Europe are helping gold maintain its safe-haven appeal. He also noted that it will. “Right now there are more threats to the probable course of the stock market than to the gold market,” he said. “When we look at the investment demand, we see a more strategic interest in gold. “If the economy continues to be threatened, I need more diversification in my portfolio,” investors say.
Another big reason gold should not fear the Fed’s hawkish stance is that real interest rates will remain low until 2022. Markets expect interest rates to rise to 3.00% by the end of the year, which he said is reasonable given the current economic environment.
