Price action in precious metals markets, and in the gold market especially, has a great deal to do with the outlook on US interest rates. The opportunity costs of holding gold go up as interest rates increase – the higher the rate, the higher the returns that the investor forgoes by holding fixed-income products rather than gold. By this logic, higher rates diminish demand for gold and, all other things remaining constant, this blonde metal's price. Nonetheless, we believe the Fed won’t normalize interest rates anytime soon. And for good reasons: The first has to do with the debt burden – it is high the world over. The US economy is no exception, and it simply cannot afford higher interest rates.