As soon as the Fed stops hiking rates, ‘gold is going to be unleashed’
The CEO of Agnico Eagle Mines Ltd., the largest producer of gold in Canada, said he’s confident that gold prices will break out of a months-long slump, and characterized his investment in a Mexican copper project as opportunistic, not a pivot from precious metals.
Gold appears to be suffering because the U.S. Federal Reserve and other central banks have been raising interest rates so quickly in recent months, making fixed-income assets such as bonds more attractive.
As soon as the Fed stops raising interest rates, “gold is going to be unleashed and it’s going to go up,” Agnico chief executive Ammar Al-Joundi said by phone from the sidelines of the Gold Forum Americas conference in Denver.
The Fed raised its benchmark interest rate by three quarters of a percentage point this week, the third consecutive time policymakers have opted for an outsized increase, reflecting their struggles to contain the burst of inflation that came with the recovery from the COVID recession. The Fed’s updated forecast suggests the benchmark rate could exceed 4.5 per cent by next year, compared with about 3.25 per cent currently.
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