Gold assets look more attractive in a low interest rate environment as the precious metal is more competitive against assets that pay low interest, like bonds. Additionally, if the Fed holds off on further rate hikes, it would suggests the economy is not as strong, which would also help gold attract safe-haven demand.
Meanwhile, UBS analysts argue that 2016 could be the year that gold and gold miners turnaround, reports Julie Verhage for Bloomberg.
“Heavy volume and sideways price action tells us that aggressive sellers are meeting equally aggressive buyers. In the lower panel, the Moving Average Convergence Divergence oscillator is making its way to a buy signal by soon crossing above the zero line,” according to TheStreet.
Market Vectors Junior Gold Miners ETF
