A muted approach to interest rate hikes would bolster gold’s appeal, since the precious metal struggles to compete against safer yield-generating assets during periods of rising rates. Furthermore, a stronger U.S. dollar typically follows a rising rate environment, which would also weigh on USD-denominated gold, especially among foreign buyers and investors.
“We could see even higher gold and gold equity prices next year and beyond, but the dollar will likely need to come down. For that to happen, the Federal Reserve will need to call time out on its quarterly rate hikes,” notes ETF Daily News.
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Tom Lydon’s clients own shares of GLD.