Gold bolts sharply higher on payrolls miss
‘Silver loves inflation even more than gold.’

(USAGOLD – 10/8/2021) – Gold quietly traded to the upside in overnight markets, then bolted sharply higher on this morning’s critical nonfarm payrolls miss. It is up $20 at $1777. Silver is up 50¢ at $23.18. The sluggish jobs market could pressure the Fed to forestall any radical departure from current stimulus policies and add to market concerns over inflation. Charlie Morris, the London-based publisher of the Atlas Pulse Gold Report, says that inflation is proving to be “not so transitory… and this is where silver comes in.”

“Many say silver is gold on crack,” he explains, “but that’s not the whole story. Gold responds to lower interest rates like the long bond, whereas silver lags gold in that scenario. Silver only responds when inflation expectations are rising, and that’s when it really outperforms gold.” He goes on to say that “silver loves inflation even more than gold … If the spike move in inflation expectations continues, I would reasonably expect silver to outperform gold from here. But remember, silver is riskier and more volatile but does the same job as gold over the long-term.”

Chart of the Day

overlay chart showing silver in various currencies

Chart courtesy of • • • Click to enlarge

Chart note:  An interesting revelation in this chart, if you look closely, is how well silver performed during times of economic uncertainty. Gold has a reputation for being a safe haven and store of value, but silver also has a history of delivering when the chips are down. Too, as this chart shows, it has performed well in all the major currencies, albeit with considerably more volatility.

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