"The bottom line is contrary to American futures speculators' fervent belief, gold thrives during Fed-rate-hike cycles historically. Rising rates are very damaging to conventional stocks and bonds, which leads investors to return to counter-cyclical gold. The lower gold's price levels entering Fed-rate-hike cycles, and the more gradual their hiking pace is, the better gold performs as the Fed forces interest rates higher......... History overwhelmingly proves this, with gold rallying in the majority of Fed-rate-hike cycles to enjoy very large average gains. And given the radical underinvestment in gold today and record extreme gold-futures shorting by speculators on the false premise that Fed rates hikes are gold's nemesis, gold's upleg in this next Fed-rate-hike cycle should prove exceptionally large. Frenzied short covering will initially fuel it." http://www.safehaven.com/article/39825/gold-thrives-in-rate-hike-cycles