It's Not All About the Fed When Talking Gold - CME Group

KITCO NEWS -- Expectations for Fed rate hikes seem to be the biggest factor weighing on gold and silver prices; but Erik Norland, senior economist for CME Group, says this is just one short-term driver. Instead, he turns his attention to another key driving force: Mining supply. Norland says that while the Fed is 'the' short-term driver, it is mining supply that could have a longer-term effect. Norland also speaks on the gold-silver ratio, which is currently above historical norms. 'I view them both as historical currencies, but the relationship between gold and silver is not stable, it has moved a long way in gold's favor. If interest rates begin to rise, it would not be favorable for gold and we could see the ratio decline,' he says.

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.