Gold Hits 2-Week High—What’s Next?
Posted By | March 26, 2017
Veteran goldbugs know it’s best to maintain a long-term viewpoint when trading gold. A couple of weeks ago, gold was undergoing a minor correction after showing considerable strength. Now it’s pushing higher again. The reason for gold’s sudden strength appears to be the Federal Reserve.
Gold reached a two-week high of $1,227.10 on March 16. That’s a one-day jump of 2.2 percent or $26.40 per ounce. The Federal Reserve raised the fed funds rate by 25 basis points on March 15, as widely expected. But the surprise was in the accompanying commentary released by the Fed, which lacked an aggressive tone about future hikes.
In other words, those who read tea leaves for a living are wondering if we will get more than two additional rate hikes this year. If not, interest rates won’t be as high as anticipated, which is good for gold. That’s because a slower increase in interest rates cuts the strength of the dollar, and the dollar weakened after the rate hike. A weak dollar reminds people about the solid value of gold and gooses demand. And that, dear friends, is exactly what happened.
Naeem Aslam, chief market analyst at ThinkMarkets, put it this way: “If the Fed only increases the rate by two more times this year, it may not be bad news for traders. Hence, the path of least resistance remains towards the upside and [gold] could touch $1,400 by the end of this year.”
Other Influences on the Economy, and How a Gold IRA Can Help
Meanwhile, President Trump is continuing to show he’s the boss. He’s outed Obama’s illegal wiretapping scheme, he’s stirred the pot with his astounding proposed budget, and now he’s getting even with Paul Ryan for his lack of support during the campaign. It’s ingenious: He eggs Ryan into releasing his Obamacare repeal, then hangs him out to dry when everyone finds out that 24 million will lose their insurance. “Ryancare” is going nowhere, and neither is Ryan, except hopefully into an early retirement. All of that has a tendency to affect the dollar and the stock market, which tends to affect the price of gold.
The rebound in gold prices is a reminder why you want to put money into an Augusta™ Gold IRA from Augusta Precious Metals and use it to buy gold coins. When you fund a gold IRA, you are taking the long view, which is what the government had in mind by deferring taxes until you withdraw money later on. Couple that with a tax deduction of up to $6,500 a year, and the Augusta Gold IRA looks—well, golden. Don’t wait another day. Open or contribute to your Augusta Gold IRA from Augusta Precious Metals today!
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