Performance After Rate Hikes Has Been Strong

 

The federal reserve is expected to raise rates for a 5th time today by 1/4 point. The chart attached shows gold’s reaction immediately after each rate increase, which has been on the upside. Those that say gold can’t rise alongside interest rates are wrong and 3 out of the last 4 hikes (except in March of this year) have produced gold rallies.

 

What will this time bring? I’m bullish. And, the monthly huge flag/triangle breakout that we saw in August is actually holding here! As you can see we are still above the top of the trend line which should provide support around current levels.

 

This is tax loss selling season but it will end for the most part this and next week. Now is the perfect time and environment to scoop up your favorite mining stocks that have been sold off the past 4 weeks mainly due to this phenomenon. Tax selling coupled with weak precious metals prices has produced a buying opportunity in MANY names we follow.

 

I’ve added a good chunk of physical gold/silver in the past week and am nibbling across the board in my favorite positions, which you should already know about and have on your radar. I’ll get into specific picks soon after premium members get a shot at adding a bit more cheaply in the small names. Certainly MUX, NG, NAK, NGD, and other larger names fall into this category and I am adding all of them.(Eric Muschinski¬†).