World Gold Council: Fed rate hikes could unexpectedly benefit gold

According to Odaily Planet Daily, the World Gold Council wrote in its gold market commentary report released on June 4 that looking ahead, as inflationary pressures rise, the Federal Reserve may need to raise interest rates. We believe that when rate hikes occur, they could counterintuitively benefit gold.

Historical data shows that in more than 50% of cases, gold has performed positively after rate hikes. The importance of the dollar to gold's performance seems to outweigh interest rates. Mid-term growth and yield convergence, along with a trend toward diversification away from U.S. assets, have already paved the way for a weaker dollar in the future. Other factors also support gold: gold-consuming major countries such as China and India, as well as global central bank gold purchase demand, are structurally less sensitive to U.S. interest rates and may provide support for gold in the future. (Jinshi Data)