We see no real data to support the old adage that Gold
prices will rise when interest rate are falling. Typically, when interest rates
fall investors will seek out equities that pay a good dividend and cash flows
into the market. However, when interest rates rise investors will take some of
the risk out of their portfolios and switch to fixed rates like bonds or CD’s.
Really supply and demand are the long run fundamentals that drive gold prices
like any commodity. However, there is some weight to the fact that when people
start leaving equities, because interest rates have risen, that gold could see
a boost as well simply because investors have become bearish on stocks and are
looking for alternatives.
If you have questions at all about fixed investing and want
more information please do not hesitate to call Old Harbor Financial at