Gold edges higher in pre-Thanksgiving trading, a quick thought on Janet Yellen as Treasury Secretary

(USAGOLD – 11/25/2020) – Gold edged higher in quiet pre-Thanksgiving trading following the sharp sell-off of the past two days. It is up $4 at $1814. Silver is up 13¢ at $23.48. The velocity of rebounds following options expiration rarely matches the downdraft. Gold, it seems, almost always takes the elevator down and the stairs back up. As we move into the long Thanksgiving weekend – a time when investors are likely to take stock of where we’ve been and where we are going – there is considerably more to weigh in the balance than in previous years. We will offer a quick thought from Canacord Genuity’s Tony Dwyer as a capstone to the events of the past few weeks and perhaps an opening salvo for what’s to come: “Janet Yellen has exceptional experience, knows how to print money, and should be instrumental in being able to negotiate a near-term fiscal package.” Though that comment is recorded in a Barron’s article on why the stock market broke 30,000, such thinking could echo loudly at some point in the precious metals markets as well.

Wishing you and yours a safe and happy Thanksgiving ………

Chart of the Day

overlay chart showing the Lewis-Mertens economic index and gold price 2000 to present

Sources:  St. Louis Federal Reserve [FRED], ICE Benchmark Administration, Daniel J. Lewis
Click to enlarge

Chart note:  As you can see, the drop in the Weekly Economic Index from early March through mid-April was the worse since the 2008 financial crisis. Since then we have had something of a recovery but the index remains deeply below the zero line. As a matter of interest, we added the price of gold. At the moment, the index is in recovery mode though it still appears a bit weak at this juncture, as it did the first time we ran this chart a month ago. Stay tuned. We will repost this chart at from time to time to see if we get a “V”, “W”, “Nike swish” or “lightning bolt” – and gold’s response. (The Weekly Economic Index incorporates a long list of economic indicators including retail activity, unemployment claims, even railroad traffic and wholesale fuel sales (to name a few) using “timely high-frequency data.”)

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