Gold rallies to begin the week; investors look nervously toward the start of October

(USAGOLD – 9-28-2020) – Gold rallied to begin the week as the dollar weakened and investors looked nervously toward the start of October – a month not regarded as particularly friendly to financial markets. It is up $11 at $1875. Silver is up 36¢ at $23.34. The markets are keeping a wary eye on Congress to see if it can meet Fed Chairman Powell’s appeal for a fiscal package to augment the central bank’s massive stimulus over the past several months. There has been talk about a prolonged stall on the economy as Washington turns its attention to the nomination of a new Supreme Court justice. Stocks, though, are up this morning – an indication that those concerns may have cooled, at least in the early going today.

Chart of the Day

overlay chart showing the relationship between the yield on 10-year Treasuries and the gold price through 9-18-20Chart courtesy of the St. Louis Federal Reserve [FRED] • • • Click to enlarge
Sources: Federal Reserve Board of Governors, International Benchmark Administration [IBA]

Chart note: “A ‘perfect storm’ of surging government debt levels, plunging real bond yields, rising coronavirus cases and deteriorating economic forecasts pushed the price of gold to an eight-year high [in late June], and some analysts now project the metal to top its all-time high within the next 12 months,” says analyst Frank Holmes of US Global Investors. Holmes finds himself in the company of a large number of analysts who have predicted the metal would reach all-time highs. He says gold is trading inversely to falling bond yields as shown in the chart.

This entry was posted in Daily Market Report, dailyquotes, Today's top gold news and opinion. Bookmark the permalink.