The Fed's Doubletalk on Friday Suggests Policy will Loosen at the Next Sign of Trouble

5:35 AM


August 29, 2016 -- Geo-political events that drove up previous metals prices in recent months are fading into the background, and Fed policy is once again the dominant concern.

Fed officials have threatened to hike interest rates for years now. We saw markets positioning for imminent rate hikes just as the year opened -- and they did so again in May.

But as often as Fed officials talk about hiking rates, they seem to talk about lowering rates EVEN MORE - sometimes in the same speech. Janet Yellen’s Friday speech from Jackson Hole was a perfect example. She mentioned an improving economic environment and said the case for a rate hike getting better.

But then the rest of the speech focused on all the other tools the Fed has at its disposal to aggressively loosen in an environment where rates are already near zero. Many analysts believe this is where Fed policy is heading at the next sign of trouble -- negative interest rates, new quantitative easing programs, and even more monetary stimulus. And all of that would be very good for gold and silver.

Live prices at MoneyMetals.com show gold currently trading at $1,321.50 per ounce on the global market, and silver is coming in at $18.64.

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