“Analysis suggests a -0.5% real rate would imply a $1,380/oz gold price and a -1.0% real rate $1,546/oz” -- that’s according to RBC’s April 10 Global Gold Outlook note, which takes a look at how lower real interest rates, coupled with a dovish Fed will impact the gold price.
Consumer prices in the United States rose 0.9% year-on-year in March of 2016, indicating that inflation is reemerging after a long period of dormancy. This should have sparked a more hawkish tone from Federal Reserve policymakers. However, the recent significant global volatility in January and February has left the path for rate hikes in 2016 much more uncertain and led to a sudden dovish turn by the FOMC.
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