The Daily Market Report: Gold Firms On Latest Growth and Disinflation Worries

23-Sep (USAGOLD) — Gold rebounded on Wednesday, recouping much of the last couple days of losses. The yellow metal is being underpinned by ongoing concerns about global growth and negative price risks.

The manufacturing sector of the world’s second largest economy contracted for a seventh consecutive month in September. China’s Markit manufacturing PMI fell to a 6½-year low of 47.0, which is an ill-wind for the global economy as a whole.

IMF chief Christine Lagarde noted yesterday that growth risks are on the rise. “The downside risks are greater than they were,” Lagarde said, citing low commodity prices, monetary policy realignment and China as primary areas of concern. There really hasn’t been any monetary policy realignment yet, and the IMF has been adamant that the Fed should hold-off on raising rates.

ECB President Mario Draghi warned today that he sees renewed downside risks to inflation. I don’t know about “renewed,” it seems like those risk have been persistently evident for some time now. Draghi said that the central bank “would not hesitate to act” if “more monetary impulse become necessary.” In other words, Draghi was echoing the threats of further QE made by his cohorts at the ECB in recent weeks.

Clearly, the age of über-accommodative monetary policy is far from over. As long as that is the case, there is cause to shift a portion of one’s wealth out of fiat currency and into a hard-asset like gold.