The Swiss bank UBS says it expects that the Federal Reserve will change its monetary policy much earlier than had previously been thought. The bank estimates that the Feds will be in a position to back off from aggressive quantitative tightening position by next summer, which would be a full 12 months earlier than markets had accounted for.
UBS economist Jonathan Pringle says the Federal Reserve’s balance sheet is on course to be in much better shape by mid-year. He explained, “Starting last month, the monthly caps that limit the maximum pace of decline of the Fed’s balance sheet increased. This ratchet higher accelerated the reduction in the size of the Fed’s balance sheet and will shrink reserves in the banking system at significantly faster pace.”
This assessment is significant because should that happen, inflation would be expected to be running much cooler than it is right now. For gold, this opens yet another avenue to push prices higher.
With current pricing so favourable for medium to long term buyers, this is another clear signal to buy gold now. Don’t delay and risk missing out on this opportunity to strengthen your portfolio.
