It’s Not All About The Fed When Talking Gold – CME Group

from Kitco NEWS

lass=”” >Expectations for Fed rate hikes seem to be the biggest factor weighing on gold and silver prices; but Erik Norland, senior economist for CME Group, says this is just one short-term driver. Instead, he turns his attention to another key driving force: mining supply. Norland says that while the Fed is ‘the’ short-term driver, it is mining supply that could have a longer-term effect. Norland also speaks on the gold-silver ratio, which is currently above historical norms. ‘I view them both as historical currencies, but the relationship between gold and silver is not stable, it has moved a long way in gold’s favor. If interest rates begin to rise, it would not be favorable for gold and we could see the ratio decline,’ he says.

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