'New Normal' Facilitates Gold Turnaround
IMF's Christine Lagarde seems to be on a quest to convince the world (everyone who's prepared to listen) that slow growth has become the new normal. And it has (finally) started to dawn upon Janet Yellen & Co at the Federal Reserve as well. Slower growth means lower inflation and thus a slower pace of Fed interest rate normalisation. This will impact on the USD and thus on just about everything else. Commonwealth Bank economists last week lowered their neutral rate for the USA to 2%. A level the Fed cash rate is not expected to reach until 2019, at the earliest. The main beneficiary of this is called gold. The precious metal looked on the verge of a new leg down in late 2015 but Q1 2016 has seen a remarkable come-back. Thank you Janet Yellen! My Weekly Insights: (VIEW LINK)
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