DMR-Gold off to ho-hum start for the week – election, Fed loom

DAILY MARKET REPORT

Gold got off to a ho-hum start this week but we should not be surprised.  Two events of more than passing interest loom – tomorrow’s election and Wednesday’s Fed meeting.  Results from the first are up-in-the-air; the outcome of the second already baked into the cake to a large extent, but the markets always worry about “surprises.”  In addition, gold rarely does well in advance of an FOMC meeting, though it has been known to press on the accelerator after the Fed governors adjourn.  As it is, gold is pretty much level on the day at $1232. Silver is down 5¢ at $14.70.  More of what we have to say about the precious metals markets this morning is contained underneath our Chart of the Day immediately below.

Quote of the Day
“I think we’re getting to the point now where the breakout is going to be on the inflation upside. The only question is when.” – Alan Greenspan, February 2018

Chart of the Day

Chart note:  Since the beginning of October, gold is up 3.9% as of Friday’s close.  Silver is up 1.9%.  Silver has been more volatile than gold as is usually the case.  Driving gold in the background, physical sales globally are on the rise with two sectors, according to analysis from the World Gold Council last week, leading the way – private investors and central banks.  Both groups are purchasing gold for the same reasons – to balance their portfolios and to protect against currency, inflation and systemic risks. Whether or not these first signs blossom into something more, however, remains to be seen.  We note with interest that, at the very least, the past month’s price action has represented a clear break with the past.  Gold and silver have gone up while the stock market has gone down – a straight-forward indication of gold’s return as a safe haven destination.

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