Fed hiking cycle got me wondering about gold's future

Catherine Bell

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Fed hiking cycle got me wondering about gold's future

catherine_bell🏆Advanced (250-500k)

about 2 months ago

Key Takeaways

•Been seeing a lot of chatter lately about how these Fed rate hikes and QT are affecting gold, and honestly, it's got me a little antsy.
•My family's always been big on tangible assets, especially after seeing property values skyrocket here in the PNW.
•Most of my inheritance, probably a solid $350k of my portfolio, is in a Gold IRA , and it’s been a comfortable anchor for a while now.

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Been seeing a lot of chatter lately about how these Fed rate hikes and QT are affecting gold, and honestly, it's got me a little antsy. My family's always been big on tangible assets, especially after seeing property values skyrocket here in the PNW. Most of my inheritance, probably a solid $350k of my portfolio, is in a Gold IRA, and it’s been a comfortable anchor for a while now.

My grandpa built his fortune in the timber industry, and he always preached about holding something real, not just digital promises. That mindset really shaped my decision to go heavy into gold, and it’s served me well through some crazy market swings since I inherited it about five years ago. But now with Powell talking hawkish and the dollar flexing, I'm starting to hear arguments that higher rates are bad for gold, making bonds more attractive and increasing the opportunity cost of holding a non-yielding asset. It creates this nagging doubt in my mind.

On the other hand, the inflation we've seen, especially with gas prices and housing costs even here in Spokane, makes me think gold's role as an inflation hedge is as important as ever. If the Fed overshoots and triggers a recession, or if they decide they can't hike rates enough to control inflation without crashing the economy, couldn't gold actually do really well? I'm trying to look at this with a long-term, generational wealth lens, not just short-term gains, but it's tough when you see headlines pulling you in opposite directions.

So, for those of you with more experience navigating these Fed cycles, what's your take? Are these rate hikes truly a long-term headwind for gold, or is it more of a short-term volatility thing that eventually corrects as real rates stay suppressed due to ongoing inflation? And for anyone else sitting on a significant gold position, how are you feeling about the current macro environment?

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4 comments

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Best Answer▲ 10 upvotes

matthew_murphy👑Elite (1m-5m)

Totally get why you're feeling antsy, it's a confusing time for sure. But honestly, while rate hikes can be a headwind for gold, it's not the whole picture. Gold has a pretty good track record as a safe haven when there's broader economic uncertainty, and let's be real, there's no shortage of that right now beyond just interest rates. The market feels like it's trying to price in a lot of "known unknowns."

Comments (4)

helen_turner💰Established (100-250k)Real Investor•about 2 months ago

Totally get where you're coming from! I'm in a similar boat, though not in Spokane. My folks hammered home the "tangible assets" lesson too, especially after the '08 crisis. I remember watching gold prices during the last hiking cycle and it was definitely a rollercoaster. It's a tough call figuring out what's next, but I'm basically doing the same – holding my breath and keeping an eye on things.

mark_adams👑Elite (1m-5m)Real Investor•about 2 months ago

Totally feel you on the antsy feeling. It's definitely a weird time with the Fed. One thing I've been curious about, given your family's focus on tangible assets, is what "after seeing" refers to? Was it a specific market event or something else that shaped that perspective?

matthew_murphy👑Elite (1m-5m)Real Investor•about 2 months ago

Totally get why you're feeling antsy, it's a confusing time for sure. But honestly, while rate hikes *can* be a headwind for gold, it's not the whole picture. Gold has a pretty good track record as a safe haven when there's broader economic uncertainty, and let's be real, there's no shortage of that right now beyond just interest rates. The market feels like it's trying to price in a lot of "known unknowns."

laura_sanchez💰Established (100-250k)Real Investor✓ Verified•about 2 months ago

Totally get why you'd be feeling antsy, Spokane! It's a confusing time for a lot of investors. One thing that helps me is to remember that gold often acts as a hedge against inflation. While rate hikes can sometimes strengthen the dollar and make gold less attractive in the short term, if those hikes don't curb inflation effectively, gold can still shine.

You might find this article on gold and interest rates helpful: https://www.investopedia.com/articles/basics/09/gold-interest-rates.asp. It breaks down the relationship pretty well. Keep an eye on inflation numbers alongside the Fed's moves!

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