Despite suffering its worst week since May last week, the outlook for gold could be stronger now than it has been for several months. The received wisdom is that higher interest rates -- like the US Fed Funds rate hike expected Wednesday -- are bad news for gold. After all, spot gold was stuck around US$1,060 an ounce two years ago when the U.S. Federal Reserve started lifting rates above their post-financial crisis level of 0.25 percent. Every time yields have peaked north of 2.5 percent over the past five years, gold has promptly rallied. Economists predict that yield barrier should be broken some time in the first quarter of 2018.As Gadfly has argued previously, gold exhibits a pronounced seasonality.

Source: The Star December 11, 2017 03:22 UTC