Gold holds steady as markets roil
Paulson outlines technical scenario for gold to rise to higher levels

(USAGOLD – 9/26/2022) – Gold held steady in early trading as currency markets roiled, Treasuries continued their sell-off, and commodities weakened. It is down $4 at $1642.50. Silver is down 18¢ at $18.77. John Paulson, the highly regarded hedge fund manager, told Bloomberg over the weekend that gold has “proven to be a source of protecting wealth” despite being down 8% on the year, simply because it hasn’t gone down as much as stocks or bonds. He went on to say that the positive real rate of return has kept a lid on the price and outlined a technical scenario under which all that could change.

“I think what needs to happen for gold to become more responsive,” he says, “is if the Fed ultimately raises rates, the economy weakens, and they pause. And then they see they can’t control inflation. Then it’s not going to come down to 2%, at best. Maybe they get it down to 4%, 5% or 6%, and then the economy weakens, they have to ease again. And then inflation comes back. At that point long-term inflation expectations will rise. People will not believe the Fed can control it. And then I think gold rises to higher levels.”

Gold average annual price
($, 1971 to present)
bar chart showing average annual gold price 1971-Sept22
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