ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Gold & Silver Investing Channel
  2. Gold Takes a Blow as Fed Presents Hawkish Stance
Gold & Silver Investing Channel
Share

Gold Takes a Blow as Fed Presents Hawkish Stance

Evan HarpDec 03, 2021
2021-12-03

Gold prices have been in retreat since the Fed indicated that rate hikes might come faster than anticipated.

The retreat comes after a short rally for the precious metal following news that the Omicron variant could be resistant to vaccines, according to Moderna’s CEO Stéphane Bancel, who indicated that it could take months to develop a vaccine that is effective against the variant. In an interview with the Financial Times, Bancel said, “There is no world, I think, where [the effectiveness] is the same level … we had with [the] Delta [variant].” Combined with news of persistent inflation, gold briefly broke through its $1800 resistance mark before falling back.

The tumble was initiated by Fed Chair Jerome Powell’s testimony to the U.S. Senate Banking Committee. Powell indicated that the Fed would speed up its taper of large-scale bond purchases at its next meeting. “Everyone got a little surprise as Powell moved closer toward the hawkish side,” said Edward Moya, senior market analyst at brokerage OANDA.

Long-Term Outlook Still Bullish for Gold

Gold’s wild year continues, and it might seem like the precious metal can’t catch a break. A stronger-than-expected job report in November blunted some of the gains made by inflation concerns, and the Omicron variant’s threat to the economy being met with a surprisingly hawkish Fed stance has also bogged gold down. Gold’s status as the ultimate inflation hedge is also being challenged by cryptocurrency.

That said, gold continues to have a lot going for it in the long run. Crypto assets remain volatile, which is not a quality any investor should seek in an inflation hedge. Most significantly though, Omicron’s impact is still unknown. With cases now reaching the U.S., there could be a real danger of another COVID surge, especially in the midst of the holiday season. According to remarks from Dr. Fauci prior to Thanksgiving, “We have a lot of virus circulating around. You can’t walk away from the data, and the data show that the cases are starting to go up, which is not unexpected when you get into a winter season. People start to go indoors more and we know that immunity does wane over time.” If the economy slows down, gold could benefit.

Finally, despite the hawkish stance from the Fed, inflation could remain persistent. Supply chain issues remain unresolved, and a situation of ongoing inflation or stagflation historically sends gold surging. Investors looking to buy now while the metal remains mired in the permeating uncertainty of the moment can check out the Sprott Physical Gold Trust PHYS. Gold miners can also be a source of big returns in times of inflation, and investors may want to look at the Sprott Gold Miners ETF (SGDM B-) and the Sprott Junior Gold Miner’s ETF (SGDJ C+).

For more news, information, and strategy, visit the Gold & Silver Investing Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X