NC State Ag Economist Dr. Mike Walden – “The Ups and Downs of Gold”


Mary:  I’m Mary Walden with economist MW welcoming you to the economic perspective.  Today’s program looks at the ups and downs of gold.   Mike, there are two reasons to watch the price of gold.  One is to watch gold as an investment, where rising prices benefit those who own gold.  The other is as a barometer of the economy.  What are the recent movements of gold telling both investors and economy watchers now?

Mike: Summary Answer

  1. gold has had an up and down trend in the last year
  2. from Jul 2016 to early September of this year gold’s price rose 12% – a very

good rate of return

  1. but in just the last month gold has lost half of that gain
  2. why – a change in attitude about the economy, particularly for inflation and

interest rates

  1. until recently the view was inflation was beginning to accelerate and this

would prompt the Fed to raise interest rates – both are bullish for gold’s price

  1. but now, the forecast has changed – inflation has backed off, and chances of

more Fed interest rate hikes have been tempered

  1. shows the difficulty of forecasting
  2. I’m MW

Mary:  And I’m Mary Walden for N C State Extension