TheGoldForecast editor Gary Wagner thinks gold has recently lost its ‘shine’ as a hedge against stocks and inflation. We have prepared Gary Wagner’s views on gold prices for our readers.
“This may affect gold prices”
Gary Wagner, regarding Federal Reserve Chairman Jerome Powell’s intention to raise interest rates, He is questioning whether he will act according to what he wants.” Noting that the Federal Reserve is facing a difficult choice, and if it raises interest rates, it could increase the government’s debt service, causing a recession, which could affect gold prices.
Gary Wagner states that there is a really big difference between the situation we witnessed in mid-2011, when gold peaked at $1,920 and then started to decline, and the current situation. “It fluctuated between $1,820 and $1,537 for about three years,” says the master, continuing as follows:
This quantitative expansion (QE) took place in the 1st, 2nd, and 3rd quarters and brought QE to an end completely. When they finished, gold prices fell below $1,500. Today we’re looking at the relative price, $1,800. Considering what we saw last time when QE ended, it really dropped that much.
“Gold prices also face financial pressures”
Gary Wagner states that in addition to monetary policy, gold also faces financial pressures. says. According to Gary Wagner, who states that the bills that President Joe Biden puts on the table will be costly, this has a dramatic effect on whether gold will remain under bearish pressure. The veteran is skeptical of the Biden administration or the Federal Reserve’s ability to fight inflation and makes the following statement:
They are way behind the curve, trying to catch up. It will be a difficult task at best. And at worst, it will be absolutely ineffective. Historically, there has never been a time when they increased interest rates less than half of inflation to combat inflationary pressures. Therefore, it seems impossible to solve the current problem by dealing with it in a much more comfortable way.
Gold is considered a hedge against inflation and stock volatility. However, as you can follow from Kriptkoin.com news, the precious metal failed to perform well against the decline in stocks in 2022. Gary Wagner, who says, “Gold does not gain anything without interest,” says that this situation takes the shine of gold as a kind of hedge.
