Precious metals break lower, resume downtrend in place before Reddit clamor

(USAGOLD – 2/4/2021) – [UPDATED] Precious metals broke lower this morning, pretty much as a resumption of the weakened state in which they found themselves just before the Reddit clamor of late last week. Gold is off $48 at $1788. Silver is down 79¢ at $26.19. Technical selling, once gold broke through the $1800 mark, looks to be accelerating the downtrend. Rising bond yields (with the 10-year now at 1.15%) and a reversal of the dollar’s downtrend (with the Dollar Index now approaching 92) are key factors in this morning’s sell-off. Too, confusion about just what the Biden administration will be looking into with respect to the Reddit–RobinHood mayhem, as announced by Treasury Secretary Janet Yellen yesterday, may have spilled over to the precious metals market. Lost in the shuffle are reports of the Biden administration fast-tracking the $1.9 trillion stimulus legislation. We will update if any news of interest surfaces at the Top Gold News and Opinion page.

Chart of the Day

bar chart showing the additions to US corporate debt levels thru Q3 20

Sources: St. Louis Federal Reserve [[FRED], Board of Governors Federal Reserve System
Click to enlarge.

Chart note:  Bloomberg recently reported that some of America’s top corporate giants – Boeing, Delta Airlines, Carnival Corporation, and Exxon Mobil are not earning enough profit to cover their interest expenses – “a key criterion, as most market experts define it, for zombie status.”

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