Fed interest rate cuts bullish for gold

“That portends very bullish things for not just the metal, but for the associated equities,’ he said.

When asked about Bitcoin, which also reached a fresh all-time high this week, Tiggre said that as a risk asset it’s gaining steam from Fed speculation as well. However, he said it’s probably being impacted more by the approval of US spot Bitcoin exchange-traded funds and the cryptocurrency’s upcoming halving event.

Brien Lundin, editor of Gold Newsletter, echoed Tiggre’s sentiment on the impact that the Fed’s upcoming turnaround is having on gold. “The big picture is that the market is now trying to price in a Fed pivot,” he said.

However, he noted that expectations keep shifting as to when the Fed’s first cut will come, which has caused some volatility in the space. But investors can be rest assured that it will be this year.

“I think the markets are missing the big picture largely, and that’s the fact that the Fed will have to pivot this year because of the cost of servicing the federal debt at these interest rate levels,” he explained. “The Fed will have to pivot and other central banks will follow suit. When that happens gold will do very well.”

When will gold stocks finally move?

With the gold price historically high, market participants are hoping much-beleaguered gold equities are next.

Tiggre agrees. “Gold stocks are still not getting any love,” he acknowledged. “Of course, I see that as an opportunity.”

Gold stock investors have been waiting for their holdings to move for some time, and Lundin said he thinks they’ll start taking off when the yellow metal gets past US$2,150 and demonstrates a clear breakout on the charts.

‘This will draw in generalist money that I think will propel the price to a higher level,” he explained on the sidelines of PDAC, adding that he sees gold reaching US$2,300 this year. “I think the money is going to flow, and I think that will very quickly lead to a big rally in the mining stocks.”