Last week, I wrote that it was highly uncertain whether the Fed, as it had promised, would raise interest rates twice more this year. The fact that gold prices initially reacted positively on the rate hike in mid-March, might indicate that the gold market also questions the future rate hikes that the Fed promised.

I finished last week by saying that I would comment on another fact of utmost importance with repercussions for precious metals markets. Here it is.

There is, indeed, another

The Fed increased the official rate in the US from 0.75 to 1 percent. The central bank appears keen to keep its promise of December last year. At the time, the Federal Open Market Committee (FOMC) implied that the official rate would be raised three times in the course of 2017. Is this unexpected rate hike in March a reason for sceptics as yours truly to expect two additional rate hikes? In my view, we should still call such expectations seriously into question.

First about that rate hike

Lately, I had a sensation that the European Central Bank (ECB) is trying to disguise and deny at any cost the fact that the Eurozone economy is in pretty good shape.

Board members of the central bank often begin their conferences or interviews by acknowledging that things are getting better, but they almost immediately follow up with a comment that slower growth is a real possibility. We can also observe this unnatural pessimism when they speak about future monetary policy. They often repeat that the central bank could extend and expand its purchases of government and corporate bonds and that interest rates will remain low for an extended time. Never ever have we heard from an ECB board member that the ECB´s asset purchase program might be reduced and discontinued or that we should