Gold, Real Rates & Debt

il y a 4 ans

Macroeconomic factors will move gold higher…

The GOLD MARKET entered a period of increased volatility during the third quarter, usually a positive indicator for the metal, write Rudi Fronk and Jim Anthony, cofounders of Seabridge Gold, in this article published by The Gold Report.

A growing number of investors and analysts recommended the accumulation of gold as it began to move out of the shadows and into the spotlight. Global ETFs have now been net purchasers for 11 months in a row and central banks have also been net purchasers every month of this year except October when two nations liquidated some of their holdings to meet Dollar requirements resulting from the Covid-induced economic crisis.

We see a further move higher in gold in the near term as the election log jam begins to clear. The election process curtailed new fiscal stimulus since July when direct transfers to individuals exhausted their Congressional approvals. This pause in fiscal stimulus, which took government transfer payments to an astonishing 25% of household income, coincided with a pause in gold’s upward momentum. However, it is very clear that further stimulus is favored on both sides of the House and even a Republican Senate, if there proves to be one, will not prevent trillions more of fiscal stimulus.

The two main drivers of the gold price are the Dollar and real yields. We expect both drivers to be positive in the coming year.

Source BullionVault

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