Gold trades nervously ahead of Fed chair’s Jackson Hole speech
Is gold being held back by Russian sales?

(USAGOLD – 8/26/2022) – Gold is trading nervously this morning as it, like the rest of the financial world, awaits the Fed chairman’s speech at the Jackson Hole conference later this morning. It is down $13 at $1748.50. Silver is down 12¢ at $19.27. A Bloomberg article headlined “Traders cancel happy hour, brace for Powell in late-night watch” describes a world glued to its screens awaiting some momentous revelation on Fed policy. We think it all a bit overdone. The real fireworks will come in late September when the Fed will be forced to make a nuts and bolts decision on rate policy.

YLem Capital’s Clem Chambers has an unconventional explanation for gold’s rangebound behavior since early in the year. “I can’t help wondering if gold is being held back by Russian sales,” he says in an analysis posted at Forbes. “Trading partners will not take the paper promises of a warring country, not if they have any sense,” he says. As a result, Russia might be drawing down its stockpile to help finance the Ukraine War. “The Russian war chest may likely be holding gold back and for me the strategy is to accumulate, because either the conflict ends or the war chest empties or both, and with a lot of inflation in the meantime, when that occurs gold will go up a lot. Unless better long term opportunities come by, a fair chunk of my portfolio will be golden.”

Russia foreign exchange reserves
(One year, US dollars)
line chart showing Russia foreign exchange reserves one year
Chart courtesy of TradingEconomics.com

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