Daily Gold Market Report

Gold gives up some of its recent gains as pivot sentiment swings back into the red
Australia’s ABC Bullion makes an interesting distinction about gold worth passing along

(USAGOLD โ€“10/5/2022) โ€“ Gold gave up some of its recent gains this morning as the sentiment needle on a Fed pivot swung back into the red zone. It is down $16 at $1712.50. Silver is down 61ยข at $20.53. Counting yesterday’s run of speeches from Fed officials, no less than eleven central bank officials will have delivered their take on the inflation fight before the week is out. The markets, it seems, have decided to hunker down and let the storm pass. Australia’s ABC Bullion makes an interesting distinction about gold we thought worth passing along this morning.

“Because gold is not an investment like shares in a company,” it says, “and has no credit risk, there is no chance it can default or go bankrupt. As a result, while it’s volatile, and can suffer drawdowns, those drawdowns inevitably resolve themselves over time. As an investor, you therefore have some comfort that any drawdown in the gold price is simply part of the market cycle (gold is not immune to bull and bear markets), rather than a potential message that the drawdown will be permanent. Investments in individual companies offer no such comfort. While a drawdown in the price of a particular stock may just be part of the market cycle and an overall stock market sell off, it could also be a warning sign that the company in question is facing serious problems and could be headed toward bankruptcy.”

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