Interest Rate Cuts: What's Next for Gold and Silver?

I believe you must have seen a lot of news yesterday about the interest rate cut by 50 basis points and how gold and silver would definitely rise.

I also analyzed some analysts' opinions yesterday and finally told you, "Sometimes logic and results are inverse in this crazy world."

I'm not saying this to boast about how accurate my predictions are, because interest rate cuts and hikes mean nothing to me.

In fact, before the news came out, I thought it would be a 25 basis point cut, but it turned out to be 50 basis points.

Gold reacted accordingly, with prices rising to $2,600 per ounce.

However, what happened next was quite surprising; indeed, the interest rate cut occurred, gold reacted, and silver rose as well.

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This also shows that market fluctuations depend not only on what they do but also on what they say.

Gold and silver then experienced a significant pullback, although the market tried to recover afterward.

So, why did this happen?

I want to quote an article from FX Street, which said that after the Fed cut interest rates by 50 basis points, it also predicted that the federal funds rate would reach 4.4% by the end of 2024, based on the median estimate.

The Fed's policymakers decided to lower borrowing costs because they are confident that inflation is moving persistently towards the 2% target, but they also acknowledged that the dual mandate of price stability and maximum employment has essentially reached a balance, while pointing out that the economic outlook is full of uncertainties.

Thus, it makes one wonder what will happen in the next few meetings.

It's worth noting that there was one dissenter in the vote, namely Fed Governor Michelle Bowman, who voted in favor of a 25 basis point cut.

The Summary of Economic Projections shows that officials estimate the rate will end at 4.4% in 2024 and 3.4% in 2025.

Meanwhile, the core Personal Consumption Expenditures (PCE) price index is expected to reach the target by 2026, although it is projected to reach 2.6% in 2024 and 2.2% in 2025, still above the target.

Therefore, inflation may remain stubborn before 2025, especially if the Fed continues to cut interest rates.

And that's probably what they will do; they will continue to ease policy, which means they will continue to print money.

The velocity of money will increase, and the prices of goods and services will also rise.

In other words, the bubble continues to inflate.

Their definition of inflation is too narrow and wrong, and it is intended to mislead the public and hide the truth.

Inflation is the expansion of the number of monetary units, and this kind of money flow will always go somewhere.

Looking back at history, we can see that in many cases, money flows into the stock market, such as in 2009.

But looking at the late 1970s, they also created money flows, but this did not prevent gold and silver from soaring, while the stock market stagnated until it picked up in 1982.

Therefore, sometimes monetary events flow into areas that people did not expect.

In the past two years, most people in this field have either been bored, scared off by the market, or extremely bored, thinking that gold will never rise.

In fact, sometimes these tectonic plate movements take a while, but I think they are at a critical point now, and events will happen much faster than we have seen in the past few years, possibly at an unprecedented speed.

I'm not trying to exaggerate in some kind of sales pitch, but in my career, I have never seen so many macro and technical events happening at the same time, and their main beneficiaries should be gold, silver, and miners.

In 50 years, gold has risen seven to eight times, so just looking at historical performance, gold has only doubled in price since the December 2015 low of $1,046, so you say the bull market is here?

No, this is just a small rise compared to the previous three bull markets.

Looking at the current events surrounding gold, monetary events, and the risks exposed by many institutions.

Once these mistakes are exposed, institutions begin to collapse, and some assumptions are proven wrong, especially when trust in the Fed begins to crumble, people will suddenly wake up and realize they have made mistakes.

What I want to say is, how many people really understand what money is?

Even among those who understand what money is, there are still many who do not fully understand.

There is also the entire Bitcoin community, some of whose ideas are correct, but I am not part of the Bitcoin camp.

Not that I think Bitcoin is a problem, but I don't think it can survive a currency collapse because I think it is just another monetary derivative, superimposed on other levels.

What I am doing now is not to awaken ordinary people, and I do not talk to ordinary people.

I talk to people like you, trying to awaken those who already have some understanding but have not fully understood.

Finally, if gold and silver pull back, it will be a very good buying opportunity.