I write a lot about central banks, commercial banks, the economic cycle (the likelihood of a recession), valuations of other financial assets (particularly stock prices) and interest rates. All this, of course, for good reason. Every single one of these factors is of great importance to understand how gold prices will perform in the future. For clarity sake, I will just go ahead and answer the question I posited in the main title: gold prices will most definitely go below $1,200 per troy ounce.

A remarkable statement by current Fed Chair Janet Yellen: she publicly stated, and without blinking an eye, that no new financial crisis will erupt in our lifetimes. With special emphasis on our lifetimes; if Yellen would have said my lifetime, things would be different (although even then she would be utterly wrong; a crisis is approaching and approaching fast). With 70 years of experience Yellen can be called a Fed veteran, and rightly so. But a veteran with “only” 16 years ahead of

Last week, the Fed decided to raise interest rates again, this time from 1 to 1.25%. As we have seen last week (in my article titled “The Keynesian Output Gap Illusion”), this was inevitable according to the Taylor rule, which the Fed still pretends to follow one way or another. Another rate hike later this year is also in the cards. Yet, something surprising happened. Something the Fed would not think possible. And what happened does not bode well for the world’s most important economy.