Brien Lundin, Editor of The Gold Newsletter, joins us today to outline the key macro factors that he is watching as signal, and what he is tuning out as more market noise. We discuss that the main catalysts for the markets and the precious metals have really been both fiscal policy and monetary policy.
As it relates to gold, there are many subtle factors that play into this complex market like interest rates, inflation, the dollar, geopolitics, the strength of the general markets, and technical trading. However, the Fed monetary tightening policy is still the prime mover, and the reality is that inflation-adjusted real rates are going to remain negative. This will be coupled with continued fiscal government spending, and as the national debt levels only grow larger, it makes the debt servicing more and more difficult the higher rates rise. There is a point coming in roughly the next year where with a slowing economy and more pressure on both consumers and businesses, and ever growing debt levels, that the central bank continuing to raise rates will not be an option.