Gold Stocks: Worth Their Weight in Gold or Gathering Dust?

Gold Stocks: Worth Their Weight in Gold or Gathering Dust?

Gold, which has traditionally been considered a hedge against inflation, has not been doing so well lately. Gold futures have slid more than 2% this year. Spot Gold prices have been pretty much range bound in the past three months, hovering between $1600 and $1800 per ounce.

There are several reasons behind gold gathering dust recently. Interest rates in the United States are on an upward trajectory after the Federal Open Market Committee (FOMC) hiked interest rates again by 75 basis points (bps) earlier this month.

Federal Reserve Bank Chairman Jerome Powell has warned that the bank is likely to increase interest rates further as it tries to rein in inflation. Inflation in the United States has now jumped to 7.7% in the month of October.