In a recent gold market report, portfolio manager for VanEck’s gold strategy, Joe Foster, encourages investors to acknowledge the positives that come with gold’s price action over previous months.
Citing the precious metal’s new higher base of around $1,800 (£1,321) an ounce, Foster said, “The many uncertainties and risks brought on by the pandemic, along with radical fiscal and monetary policies, have lifted gold to new highs as investors sought safety.”
Foster is confident that those who stick with the precious metal will reap significant rewards later this year.
He said that if you look at gold’s performance over the past three rate hikes in 1999, 2004, and 2015, “gold declined between 5% and 10% in the six months before each initial hike. For the six months following each initial hike, gold gained between 10% and 20%. Perhaps gold’s weak performance in 2021 is normal pre-rate hike behaviour. 2022 should be an interesting year.”
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