Gold and silver suffered another severe setback yesterday. The price of gold was over $ 70, the price of silver over a dollar. The reason was (once again) the US Federal Reserve (FED). The Fed was surprised at the budget spending in the US so soon after the corona crash. According to media reports, this statement is said to have put gold under pressure. Well, one could discuss at this point whether household spending was really that surprising given the corona money in the USA. But the far more important question is: does anyone really believe that this will change Fed policy. Will the Fed think about rate hikes sooner? Will the Fed change its ultra-loose monetary policy? Is there still an exit from this loose monetary policy? After all, all attempts to get out of the expansionary monetary policy have so far failed miserably.
Bull market: Yes or no?
Much more important for medium to long-term oriented investors is the question: Are we in a bull market or not? And given the all-time high in gold, the jump above $ 2,000 in connection with the rally we’ve seen in silver over the past few weeks, the only answer to that question is a “yes”. And here the old rule applies: Setbacks are buying opportunities in a bull market. Investors should take advantage of these opportunities to position themselves for the next phase of rally in precious metals.