Real interest rates should stay negative as the Fed raises rates, creating a buying opportunity for gold, says Vince Lanci, founder of EchoBay Partners.
"If an unqualified spike in inflation were to come out, the stock market should definitely sell off," Lanci told Kitco News, "gold should sell off...gold should react the same way as stocks in the short term."
Lanci said that since the Fed's monetary policy has historically trailed inflation, real interest rates would still be kept low as nominal rates rise to keep up with rising inflation. Negative or low interest rates are a boon for gold prices.
On key levels for gold, Lanci said that above $1,300 on ounce, investors may see some short covering, and a rally up to $1,350.
"If we stabilize above $1,330 with the stock market where it is, then I think we're on path to $1,400 in two or three months," he added.
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