Daily Gold Market Report

Gold’s Outlook Amidst the Restart of Student Loan Payments and Decline in Consumer Spending
US Government Funding Punted Till November

(USAGOLD – 10/2/2023) Gold and Silver prices are lower again Monday morning. Gold starts the week off at $1837.87, down $10.76. Silver trades at $21.54, down 63 cents. Gold current YTD return is 0.86% while Silver is down -9.02% YTD. The restart of federal student loan payments, after a pandemic-era pause, is expected to have significant implications for the U.S. economy. As many as 40 million Americans will now be responsible for a new monthly bill, which they haven’t had to pay in over three years. Economists, including Mark Zandi, chief economist at Moody’s Analytics, predict that the economy will face challenges in the fourth quarter, largely due to the end of this student loan payment moratorium. Retailers and lenders, in particular, are preparing for potential economic impacts. Financial services firm Jefferies has highlighted a potential risk to consumer spending, with their survey indicating that around 70% of borrowers plan to delay major purchases in October. Many of these individuals also intend to reduce their spending on clothing, travel, and food.

USAGOLD Comment: The resumption of student loan payments is expected to put a damper on discretionary spending. As consumers cut back on non-essential purchases, sectors that rely heavily on discretionary spending, such as retail, travel, and entertainment, could see a decline in revenues. If the restart of student loan payments leads to broader economic challenges, it could very well be a catalyst for responsive/accommodative actions by the Fed, and a more favorable macro-economic environment overall for metals. Historically, during times of economic uncertainty, investors often turn to gold as a safe-haven asset.