Rising Interest Rates Are a Boon to Precious Metals Prices

Precious metals slumped in the final quarter of 2016 as it became apparent the Federal Reserve will continue normalizing interest rates, perhaps at an even faster pace than previously assumed. However, tighter monetary policy is not to blame for the collapse in precious metals prices, and contrary to conventional wisdom, cannot be assumed to be bearish for these commodities. This belief, while not entirely unfounded, ignores decades of evidence showing the complete opposite is true.