As the macroeconomic conditions continue to affect the gold price, investors are wondering where the precious metal will go. Meanwhile, Adam Hamilton, founder of finance company Zeal LLC, made a high prediction about gold prices. Cryptocoin. com
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Adam Hamilton drew attention to these levels for gold prices
As we have previously reported, the US Federal Reserve published what was spoken at the last meeting of 2021. At this meeting, the signals were clear that the rate hike would happen sooner than expected. Many people wondered how gold would act in this situation. Will it rise? Will it increase? An expert published a comparative analysis on this.
Publishing his analysis on gold, Hamilton says that the news that the US Federal Reserve will increase interest rates will not prevent gold. Looking at the historical cycle, Hamilton said, “Gold has made strong gains in some of the rate hike cycles we’ve witnessed since 1971. Rising rates may bring sales to the stock markets and fuel demand for gold,” he says. Drawing attention to the performance in interest rate hike cycles since 1971, Hamilton emphasizes that gold has risen by 27 percent on average in 11 interest rate hikes. On the other hand, the remaining 5 interest rate hikes declined. The decline averaged around 14 percent.
The expert believes that the performance of the precious metal during interest rate hikes is related to how pricing enters the cycles and how fast the Fed tightens. Therefore, Hamilton pointed out that the Fed’s decision to increase interest rates may increase gold because the stock markets show a downward trend in the high interest rate environment. Gold needs to hit $2,980 to rise commensurately with this massive flood of new coins. ” he uses.