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Negative interest rates drive demand for gold

Tuesday, March 15, 2016

Anecdotal evidence from Japan's bullion retailer is that the shock decision of the BOJ to move to a negative interest rate setting in January 2016 has stimulated demand for gold, see Bloomberg's story here.

The impact of global negative rates was reinforced last week when the ECB decided to increase its fiscal policy stimulus by taking the Euro zone deeper into negative interest rate territory and broadening its programme.  The ECB's President lengthen the market's expectations about policy's time period for negative interest rate by stating, "... to remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases." see the ECB announcement here.

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