While the market rotates out of tech and into defensive sectors, investors could see another rotation from debt securities to precious metals this month. That’s because in his speech at Jackson Hole on Aug. 22, Federal Reserve Chair Jerome Powell alluded to upcoming interest rate cuts at the central bank’s FOMC meeting scheduled for Sept. 16–17.
That caused stocks to rally after Powell's speech. The S&P 500 flirted with its all-time high while gaining 1.52% on the day. But investor euphoria wasn’t limited to the equities camp. The news was celebrated by gold bugs, as the precious metal historically experiences bullish price movement when investors flee fixed income due to lower yields and rotate into other safe-haven assets.
