New all-time highs for gold and silver?!

The peculiar situation of the Fed

While many institutions proclaim that we will see seven or even more rate hikes the actual situation on the ground does not really reflect this. Due to the enormous amounts of debt which have been accumulated over the last cycle and the current inflation dilemma the Federal Reserve is trapped. Not only is the market signalling that rate hikes are not welcome, the US also has midterm elections this year. It is especially inflation, which will become the main headache of the Fed and many investors, which are not used to operate in such an environment. At the same time the recession clouds are getting darker and darker.

How will the war in Ukraine effect gold?

While the conflict will have long-lasting effects on the world and on markets in general, most people really overestimate the geopolitical bonus of gold. While a short-term impact on the price of gold was clearly visible at the start of the war, this quickly reversed. The yellow metal  works as an inflation hedge, it works against turmoil on equity markets, but historically people don’t start panic buying gold because of a war.

All-time highs this year

With only about $100 away from the all-time high, gold is looking really promising right now. Large flows into the largest gold EFTs and increasing tensions on equity markets are currently fuelling the bull market in gold. Gold miners have also been experiencing a recent performance boost. In such an environment, silver will soon follow.

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