The Fed plans to reduce bond holdings and increase interest rates in 2022. History tells us gold is one of the strongest assets in this environment.
- Yesterday’s FOMC meeting minutes signaled another hawkish pivot toward interest rate increases and deleveraging, or reducing the value of bonds held by the Fed.
- Stocks, bond prices, and gold all took a hit. The S&P 500 was down 2.38%. The tech-heavy Nasdaq 100 was down almost 4%.
- Gold’s most recent breakout began in August 2018, right in the middle of the Fed’s last bout of deleveraging. Could history repeat itself in 2022?