Yamana Gold Inc (AUY)

[OTCdoc]

Gold's behavior in past Fed-rate-hike cycles. Before this one, there have been 11 since 1971. Gold's average gain through the exact spans of all of them was 26.9%, an order of magnitude higher than the stock markets! Gold's average gain in the majority 6 cycles where it rallied was 61.0%, and it only saw average losses of 13.9% in the other 5 cycles.

During the last Fed-rate-hike cycle running from June 2004 to June 2006, gold powered 49.6% higher. That was despite the Fed more than quintupling the federal-funds rate to 5.25% through 17 consecutive rate hikes totaling 425 basis points. Gold thrives the most in Fed-rate-hike cycles when it enters them near secular lows and they are gradual. And both these conditions happen to be true in spades today.