Gold tracks lower on the prospect of Fed tightening
Meanwhile, physical demand continues to run strong in Asia, Europe, and the United States

(USAGOLD – 9/28/2021) – Gold tracked lower in today’s early going responding to the prospect of Fed tightening, a weakening bond market, and a firmer dollar. It is down $15 at $1736.50. Silver is down 23¢ at $22.46. Though selling in the paper gold market dominates the price discovery mechanism, physical demand for coins and bullion among private investors continues to run strong globally, according to recent press reports. Investment demand in China is up 33% over last year among investors worried about the fallout from the Evergrande meltdown. Indian demand is also up as prices decline ahead of its festival season. German investors are buying on inflation concerns and recent election results. Demand in the United States is also strong, with the World Gold Council reporting record gold coin and bar demand in the first half of 2021.

“Money continues to pour into precious metals, fine art, real estate, and other hard assets,” writes Equity Management Academy in a report posted at Seeking Alpha, “Price and monetary inflation are not temporary. They are here for a while. That is why money is pouring into hard assets in an attempt to avoid losing value in relation to inflation… [G]old and silver have a long history of maintaining their value, especially in times of crisis and change, like we are experiencing today. We recommend taking advantage of pullbacks in gold and silver to add to your long-term position in precious metals.”

Chart of the Day

overlay line chart showing gold, silver and stocks since 2007
Chart courtesy of • • •  Click to enlarge

Chart  note: This chart shows the performance of gold, silver, and stocks from 2007 to present, a period that encompasses the QE 1, 2, 3, and 4 stimulus programs. Gold is up 188% over the period, silver 85.5%, and the Dow Jones Industrial Average 180.7%.

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