Gold drifts lower in quiet, directionless trading
‘In the 45 years I have been an investor, I cannot recall a more dangerous period than today.’

(USAGOLD – 10/7/2022) – Gold drifted lower this morning in quiet, directionless trading as investors remained unsettled about inflation’s future and unnerved by Fed tightening policies. It is down $2.50 at $1712. Silver is level at $20.73. London-based John Ruffer (Ruffer Investment Review) says that in his forty-five years as an investor, he “cannot recall a more dangerous period than today.” It is a time when “plentiful liquidity” is “overwhelmingly attractive.” He says opportunities will arise in the aftermath of a crisis, but “first, we have to get through the storm.”

“When there’s no money in the system and the channels of its creation are blocked,” he writes in an advisory released yesterday, “many fine investments, which, in normal circumstances would be mouth-watering to own, are unsellable. If, at that point, you need money, and all you have are assets – watch out! We are watching out.… We see danger ahead. Markets are still too high, and protection is expensive in an increasingly nervous world; common sense suggests one should invest conservatively, and in safe assets.” Though Ruffer does not mention gold in this particular advisory, the firm has consistently advocated it over the years as a sensible portfolio holding for the times. (Please see Ruffer Radio’s “Gold Matters,” September 2020)

Annotated chart showing the price of gold during the gold standard and fiat money eras

Notable Quotable
“It’s getting harder to buy and sell Treasuries in large quantities without those trades moving the market. Market depth, as the measure is known, last week hit the worst level since the pandemic crash of 2020, when the Federal Reserve was forced into a massive intervention. With fear of a global recession, escalating geopolitical tensions thanks to Russia’s war on Ukraine, the UK’s tax-cut fiasco and the potential for further defaults by developing nations, investors may not be able to rely on Treasuries as the haven they once were.” –

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