Gold down on Iran claim of U.S. offer to drop sanctions

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(USAGOLD – 9/27/2019) – Gold dropped through the psychologically important $1500 mark in early European trading after Iran’s President Hassan Rouhani announced that the United States offered to remove “all sanctions on Iran in exchange for negotiations,” according to a CNBC report.  Oil tumbled on the news and gold along with it. Thus far, there has not been verification of Rouhani’s claim from the American side. The yellow metal is down $17 at $1490. Silver is down 52¢ at $17.39. The news from the Middle East overshadowed lingering concern about the Fed’s continuing bail out of the repo market. In a report released yesterday, TD Securities addresses those concerns and how they might impact the gold market.

“This short-term repo market turmoil,” reads the report, “prompted the US central bank to inject just over $140 billion worth of liquidity into the market with a promise of more. The associated volatility before the intervention and the resulting speculation of systemic issues that may make it necessary to permanently expand the Fed’s balance sheet, should also help to keep gold bid. Indeed, The New York Fed announced that they would increase their daily repo transactions from the previously announced $75 billion to $100 billion through October 10th, and also offer two-week repo trades as well, which they increased from $30 billion to $60 billion, which should all help gold move into $1,600/oz territory.”

Quote of the Day
“One of the most important warnings offered by firefighters is simple: get out early. In the face of wildfires, some homeowners get the idea of staying in their homes and riding it out. As one firefighter warned ‘The point is to go.’ But if you don’t, it’s better to stay than to panic and run in the midst of a firestorm of smoke and embers. It’s not the fire that gets you. It’s the heat. Even before the flames reach the house, it can be fatal to stand outside trying to protect what you have (h/t John Galvin). Similarly, our ‘Exit Rule for Bubbles’ is straightforward: You only get out if you panic before everyone else does. You have to decide whether to look like an idiot before the crash, or look like an idiot after it.” – John Hussman, Hussman Funds

Chart of the Day

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Chart note:  We will let the chart speak for itself.  Where do you believe we are in the stock market cycle?  And where would you place gold?