Solid physical demand for gold and silver tells you where prices are going in the long term – LBMA

By Neils Christensen

2022.10.21

(Kitco News) – Persistent inflation will force the Federal Reserve to aggressively raise interest rates through the rest of the year, maintaining solid headwinds on gold and silver prices, according to a group of fund managers.

In a panel discussion during the London Bullion Market Association’s annual precious metals conference, participants generally agreed that gold and silver prices could struggle through the rest of the year as rising interest rates and solid momentum in the U.S. dollar keep investment capital on the sidelines of the precious metals market.

However, sentiment on the stage was still relatively bullish for gold and silver’s long-term potential, despite the short-term headwinds.

The panelists agreed that inflation remains a global problem and the Federal Reserve has to maintain its aggressive monetary policy stance to cool down and reset the global economy. John Reade, chief market strategist at the World Gold Council and moderator of the discussion, said that in the current environment, he doesn’t see a scenario where the U.S. dollar weakens anytime soon.

Although the Fed will continue to raise interest rates through the end of the year, some panelists questioned whether it will be able to achieve its goal.