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The market is speculating wildly about Fed rate hikes again. Let me cut to the chase: the probability of a rate hike is zero.
Every time conflict breaks out, oil prices spike first and precious metals stocks get hammered, but only after oil prices cool down does gold truly take off.
The logic is straightforward: when war just erupts, everyone scrambles for oil and tops up stock margin accounts, so they have to sell gold for cash first. But as time drags on, US military spending explodes and the national debt balloons to 39 trillion, leaving no path forward except printing money.
US Treasury bonds have become Ponzi-fied—holding gold is far more reliable than clutching depreciating dollars.
Don't listen to Powell talking tough about not cutting rates and raising them instead. Even Trump is cursing him out, threatening to send him to prison. Once Trump takes office and appoints his own person as Fed chairman, rate cuts are a done deal—no shrewd operator would hire someone working against their interests.