Dispelling the Rising Rates/Bad for Gold Myth
There's a common misconception that rising US interest rates are bad for gold - when history typically tells us that the opposite is in fact the case. The best example was the 1970s, when nominal interest rates more than doubled to more than 20% - yet over the same period gold prices rose 24 times – from $35 to over $850 per ounce, as evidenced in the accompanying chart. At the end of the day it's all about negative real interest rates, not rates per se.
Gavin has been a senior resources analyst following the mining and energy sectors for the past 25 years, working with Intersuisse and Fat Prophets. He is also the Executive Director, Mining & Metals with Independent Investment Research (IIR).