The u.s. Fed rate hike got the attention of the whole planet basically. Rarely do we see so much focus on one specific news item.

Our loyal readers know that our main mantra in 2015 has been the overly hyped rate hike. The Fed Chairmen Bernanke and Yellen have been ‘yelling' since 2010 that they will raise interest rates. Only after 5 years did they take action.

The narrative surrounding this has kept markets hypnotized.

The team at Secular Investor has gone through many up and down cycles, euphoria and other irrational stages of normal market cycles. Our 6th sense says that gold's correction is the result of an irrational behavior of investors and traders.

Weak dollar ahead

If history serves as any guide, our thesis should be correct. The chart below shows that the dollar has always weakened, even significantly, after the first rate hike of a new rate cycle.

Source: US Funds

Earlier this year, we wrote that the dollar typically puts pressure duing the first stage of its uptrend. Case in point: the monstrous rally of the dollar in 1997, which had put a lot of pressure on commodities and gold. However, two years later, the dollar continued its surge, without pressuring gold and commodoties.

We believe we are in a similar situation today.

If anything, gold miners, the leading indicator in the precious metals complex, are confirming our viewpoint.

Weak dollar, new bull market gold miners

As the second chart shows, miners have NOT collapsed after the interest rate hike. On the contrary, they continue their consolidation, which started in November of this year.

We obviously want to see the 2015 lows hold. But given the muted effect of precious metals after the rate hike on Wednesday, we are extremely optimistic.

Our viewpoint is contrarian in nature. We know that it is hard for most investors to be contrarian. Investors are used to only believe what they see … but that is not a recipe for success!