26-Sep (USAGOLD) — Gold is trading modestly higher this morning, buoyed by a softer dollar and weaker stocks to start the week. The yellow metal remains generally consolidative, but still within striking distance of the highs for the year set at 1375.15 in early-July.
Today’s U.S. data were lackluster, doing little to bolster the odds of a rate hike before year-end. U.S. new home sales fell 7.6% in August and the Dallas Fed index rose to -3.7 in September. The latter was below expectations of -3.0, versus -6.2 in August.
Some financial pundits are looking to tonight’s Presidential debate to possibly trigger some market volatility:
Quite honestly, I’d like the market to shift focus to something other than the Fed. However, I don’t know that either of the Presidential candidates are likely to have a materially different impact on gold.
Whomever takes the oath of office in January, we’re still going to be mired in the same low growth, low inflation environment. The national debt is going to continue its unstoppable march to $20 trillion and beyond. Any meaningful reforms on the fiscal front are going to have to wend their way through a divided and partisan Congress.
This all translates into a reality where the central bank remains charged with keeping all the plates spinning, with little help from lawmakers. If there are going to be rate hikes — to borrow and adjective from Jon Hilsenrath — they will be at a “glacial” pace. And that should continue to bode well for gold.