Gold tracks south for the fifth straight day
Gold Newsletter’s Lundin tells why the Fed will be forced to ‘take a knee’

(USAGOLD – 9/1/2022) – Gold is tracking south again this morning, making it five straight days of trading in the red. It is down $10 at $1703. Silver is down 27¢ at $17.80.The bond market is tanking again this morning as it gears up for full implementation of the Fed’s quantitative tightening program, and stocks look shaky. Legendary money manager Jeremy Grantham is out with another warning on the stock market this morning advising investors to “prepare for an epic finale.”

In the latest edition of Gold Newsletter released yesterday, Brien Lundin predicts gold will break the hold of “algos, hot money traders and manipulators” as it returns to trading on the fundamentals. “If I’m correct,” he writes, “the spiraling costs of servicing the federal debt will soon force the Fed to take a knee in its fight against inflation. Even if the rate of inflation is dropping, it will remain elevated. This, along with the Fed essentially admitting that the size of the debt makes it powerless to fight inflation, would result in a market environment bearish for stocks…but very bullish for precious metals.”

line chart showing interest payments on the federal debt
Sources: St. Louis Federal Reserve [FRED], U.S. Bureau of Economic Analysis

Chart note: As you can see in the chart above, interest payments on the national debt are now at $600 billion. To put that number in perspective, the United States spent $754 billion on national defense in fiscal year 2021. 

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