October Nugget News
30 Day Market Moves
Silver $84.18 (-4.85%)
Gold $5880.38 (- 2.35%)
Gold Outlook...October is always a spooky month and a great start to the last quarter of the year. We always say when Gold is down, buy more!
The fundamentals haven't changed.
- Governments around the world are spending and printing money at record pace.
- Debt levels from Corporations, Governments and Individuals are at record highs.
- Overlapping conflict on the world stage is fragile.
- Central Banks around the world are buying record amounts of Gold year-over-year for the past 5 years.
- Gold demand from the AI sector rose 2% from a year earlier to 80.4 metric tons in the second quarter, according to the World Gold Council. Electronics demand climbed 4% to 68.3 tons, fueled by AI infrastructure, high-end semiconductors and advanced components.
Silver Outlook...The silver market continues to struggle in the face of persistent inflation pressures and higher bond yields. However, one market strategist says the precious metal remains an important monetary asset and diversification tool.
Despite the difficult headwinds, analysts see silver carving out a new base and believe its long-term uptrend remains firmly in place, as they are skeptical that the Federal Reserve will be able to bring inflation fully under control.
Although rising interest rate expectations have weighed heavily on precious metals, investors should not overlook the longer-term risks posed by persistent inflation and the declining purchasing power of fiat currencies.
-At $40.26 trillion, the US national debt is bigger than the combined annual GDP of China, Germany, India, Japan, and the UK.
Bond Yield Spikes... Bond yields have risen to levels not seen since 2007. This has created significant headwinds for gold and silver; however, the metals have shown more resilience than one might expect in this environment.
Higher interest rate environments have traditionally been bearish for gold and silver. Since they are non-yielding assets, owning metals when interest rates are high comes with an opportunity cost. But despite persistently rising bond yields, gold has maintained support over $5,800 per ounce.
The war with Iran has compressed the Gold spring. It's as if the war put a lid on the gold market. Every time there is even the slightest hint the conflict could resolve, gold spikes. Conversely, every time we get bad war news, gold gets pounded lower. This indicates that when the war ends once and for all and the lid comes off, gold could take off very quickly.
-The temporary headwinds for gold are enormous and, in almost any other environment, would probably have pushed prices significantly lower. Prices are not lower because underlying factors are so strong.
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