Late last month, gold and silver prices saw new highs. On February 23, anxiety of the new U.S. president and his administration’s new policies caused prices to hit a 3.5-month high.
The momentum continued over the next few days, pushing gold and silver slightly higher in anticipation of President Trump’s speech to the U.S. Congress about his plans for growing the country’s economy.
Managing director of American Precious Metals Advisors and senior economic advisor to Rosland Capital, Jeffrey Nichols, was interviewed about his insight on the recent jump in prices and outlook of precious metals. Here are a few quotes from him:
In recent weeks, with gold trading in a narrow range and good technical support apparent to all, perceptions of momentum have also shifted and today traders just didn’t want to lose out — or bet against — a rising market.
Additionally, there has also been a positive shift in inflation and inflation expectations offsetting the expected rise in interest rates. In other words, real ‘inflation-adjusted’ interest rates are falling, and this is — and will continue to be— a big plus for the yellow metal.
Gold has a bullish posture considering the metal has been able to rise despite a bearish factor — expectations for higher U.S. interest rates this year.
In my view, an accelerating U.S. consumer-price inflation rate will outpace any increase in nominal rates brought about by the Fed – a trend that will contribute to record high gold prices in the next few years.
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