Fed rate hike, inflation, demand-supply equation - what other factors will drive gold in 2H? - Video
Kitco News is interviewing CME Group’s senior economist Erik Norland on his prediction on what direction gold will take in the second half of the year.
Neither Greek turmoils, nor China equities crash made investors turn to gold. CME Group's analyst says this was because gold is mostly responsive to inflation. He describes what factors create an opposite of inflation in China.
He notes that gold is an extremely volatile asset having 20-25% of annual deviation. Thus, if you are a Chinese investor who is mainly concerned about deflation and weakening of the renminbi, you'd rather go for the U.S. dollar or government bonds.
Norland also covers the Fed rate hike to which gold and silver have negative sensitivity. He also finds the demand-supply equation important for gold and silver. Supply is what has been pressuring gold prices recently, Norland says.
