“Higher inflation is very bullish for gold and very bearish for the US dollar”.— Precious Metals Advisor Tim Murphy
The fiat market has been experiencing a lot of pressure and uncertainty lately, especially the US dollar. Rising inflation is causing people to lose faith in the stability of government-backed currencies and associated assets. Many investors are turning towards precious metals instead.
However, the Fed’s plan to raise interest rates is causing some confusion. Economists are telling the public that hiking interest rates won’t boost gold and silver prices, but there’s more to the issue than meets the eye.
Watch the video to hear what Precious Metals Advisor Joe Elkjer & Tim Murphy are saying about the impact of impending rate hikes on precious metals.
Will Rate Hikes Spell Disaster for Precious Metals?
Generally speaking, higher interest rates aren’t good for gold and silver price performance in the short term. The reality is a bit more complicated though. The reason behind rising interest rates has a bearing on the price action of precious metals.
In this case, the Fed is boosting interest rates in an attempt to curb inflation. As many investors are aware, inflation tends to drive gold and silver prices higher and the value of the US dollar down.
🚨 Suggested Reading: Bank of America Still Bullish on Gold and Silver: Any Dip in Price is a Strong Buying Opportunity
Inflation Could Heat Up Over the Summer
Inflation is getting out of control, and people are feeling the strain in every area of their lives. It seems like every week, the government is putting out gloomier numbers. Unfortunately, there’s reason to believe the state of inflation is much worse than our financial czars are revealing.
As if things weren’t painful enough, some economists are anticipating an uptick in inflation during the summer. Countries around the world are expected to struggle to produce goods and commodities which further strains the already troubled global market.
The Fall of the Petrodollar & Rise of Currency Wars
All of this economic instability is shaking up the current hierarchy on the global stage and not in the US’s favor. The petrodollar, which has solidified the greenback’s position as the world’s reserve currency, is coming under threat with the rise of the petroyuan.
On top of that, Russia and China are engaged in an all-out currency war in an attempt to dethrone the dollar. Both countries have been hoarding gold for the past few years and actively avoiding trading with other countries in USD.
Protect Yourself Against Inflation with Precious Metals
Despite what some people might fear, the Fed’s rate hikes aren’t expected to stop the precious metals market from continuing its surge. Even with the recent dip, gold and silver prices are actually anticipated to continue growing as more and more investors seek these inflation hedges to protect their wealth against worsening inflation.
If you want to learn more about how precious metals can shield you from poor economic conditions, request your FREE COPY of our popular gold and silver investment guide.