Gold: At the Crossroads of Fiscal and Monetary Policies

Gold: At the Crossroads of Fiscal and Monetary Policies

By Erik Norland, Senior Economist, CME Group

Highlights

  • Gold implied volatility has languished over the past two years
  • Growing budget deficit has weakened the dollar while supporting gold
  • But higher interest rates have reined in any rally in gold prices
  • Bearish forces of tigher monetary policy offsetting benefits of looser fiscal policy
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