The Gold IRA Company

Commodity Trade Mantra: Part 1 – What’s Driving Gold Prices Higher & What Will Explode Them Further

Article By: CommodityTradeMantra

For as long as I can remember, I’ve stated that negative nominal and negative real interest rates are the key, primary driver for higher gold prices. And now we’re seeing this play out in real time.

First of all, what is the “real” interest rate? Simply put, it’s the nominal or stated rate of a bond minus the inflation rate.

Six weeks ago, real interest rates were falling as the Covid effect rippled around the world and economic output was slowing. In that post above, however, we argued that eventually this pattern would shift and the world would move toward stagflation and sharply negative real rates. We are still on course for this eventuality.

However, in the time since, we’ve also learned that the U.S. Federal Reserve is actively considering a program of Yield Curve Control or “rate caps”. The imposition of a rate control program would institutionalize negative real rates. Why? To read this article in its entirety click here.

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Although the information in this commentary has been obtained from sources believed to be reliable, The Gold IRA Company does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. The Gold IRA Company will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.