KITCO NEWS - With the U.S. Federal Reserve backed into a corner and not being able to raise interest rates, it is nonsensical to not have gold exposure, this according to Amir Adnani, chief executive officer for gold producer, GoldMining.
"There are so many issues that puts the Fed into a difficult corner and I think it is silly for someone not to be exposed to gold and have insurance," Adnani said on the sidelines of the Precious Metals Summit in Beaver Creek, CO.
"The stock market is at all-time highs, everything is priced to perfection and there are so many issues in the U.S. that puts the government in a difficult position.
This is the second longest bull market in the history of America - it is very difficult to sustain and why would you place all your eggs in this one basket? Gold is the ultimate insurance at a time like this and investors need to be strapping on this insurance."
The yellow metal was in some trouble when a surprisingly hawkish tone on U.S. monetary policy was sounded by the Federal Reserve on Wednesday afternoon. Gold and silver prices sank to three-week lows Thursday, on ideas U.S. monetary policy will significantly tighten in the coming months. December Comex gold was last down 1.72% at $1,293.70 an ounce.
The Fed did not raise interest rates this week but did announce that in October, it will start reducing its big balance sheet of U.S. securities. What was surprising is the Fed's upbeat tone on the U.S. economy despite two major hurricanes that just hit the U.S. mainland. A December interest rate hike remains firmly on the table and the Fed also wants to raise U.S. rates three times in 2018.
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This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.