Well it was Volcker and his policy to tame inflation that eventually tanked gold. Obviously we are not near those rate hike extremes, but we do not have a good handle on what the actual rate of inflation is due to the Gov't #'s. But if we were to go by their #'s then returns on cash start to look better than a non-interest bearing physical asset like gold or silver especially if rates continue to increase. This is where the weak dollar plays devils advocate.
A lot of things have to be taken into consideration; rate of inflation vs rate of return, beginning or end of hike rate cycles and will rate hikes if they continue be good or bad for returns of financial assets, etc and so forth.
It is a tough call indeed, but the premise I stated is what is generally understood and if rates exceed that of what is understood to be the rate of inflation, then this would be bad for PM's. But as long as the U$D weakens, gold will climb. A higher rate of return on a weakening currency is not favorable.
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