Gold begins week on a positive note ahead of all-important Fed policy meeting

(USAGOLD – 1/25/2021) – Gold began the week on a positive note as Congress got down to the nuts and bolts of the Biden administration’s $1.9 trillion stimulus package and investors braced for the Fed’s all-important policy meeting and press conference at midweek. It is up $12 at $1870 in early U.S. trading. Silver is up 22¢ at $25.81. On the week ending Friday, gold looked like it might have turned a corner posting a nearly 2% gain. Silver posted a more than 3% gain after all was said and done. TF Metals Report’s Craig Hemke has some interesting things to say about the Fed’s upcoming meeting and what it might mean for the price of gold in the weeks ahead.

“[Y]ou and I know that all of the bullet points are extraordinarily bullish for precious metal ownership,” he writes in a report published at Seeking Alpha over the weekend. “However, The Machines that determine price have no concept of this. So, what we’ll await in 2021 is the moment when The Machine ‘fundamentals’ switch again to our favor. And what will be the driving factor? When The Fed begins to implement Yield Curve Control. This change in Fed policy, however, will come in stages. The first will be a mention of buying longer-term maturities within their existing QE program. If that doesn’t work, they’ll next actually start buying those 7-, 10-, 20-, and 30-year maturities. And if that doesn’t serve to cap rates below a certain level, they’ll codify this desire into a formal written policy change.”

 Chart of the Day

Overlay line chart showing gold, silver, stocks performance 2000 to 2020 in percent

Chart courtesy of • • •  Click to enlarge

Chart note: Since the beginning of gold’s secular bull market in the early 2000s, we have recommended an unambiguous course of action: Own the physical metal – fully paid for and stored nearby – then sit back and watch the show. Those two courses of action have paid handsome dividends over the years, both in terms of peace of mind and a healthier balance sheet. In fact, for some, that prescription has created significant wealth. Since the turn of the century, gold is up 562%; silver, for its part, is right at 402%. By way of comparison, the Dow Jones Industrial Average is up a meager 178% over the 20-year period.

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