Gold pushes lower on strong employment report

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(USAGOLD – 10/4/2019) – Gold pushed lower this morning in response to a favorable jobs report showing unemployment at a 50-year low.  It is trading at $1501 – down $7 on the day. Silver is trading at $17.44 – down 20¢ on the day.

The World Gold Council is out with a report this morning saying that gold demand might ramp up in China for a  totally unexpected reason – renewed inflation driven by the rising price of pork. “Gold is well known for its inflation hedging properties,” writes the Council’s Ray Jia. “During periods of higher inflation – higher than 3% – the gold price has risen in both the US and the UK, by an average of 15% and 12% respectively. And it’s the same story in China. During the past 17 years, the annual nominal return of Au9999 – the physical gold contract traded on the Shanghai Gold Exchange since 2002 – averaged 17% during years when inflation rose above 3%.”

Inflation is one problem the U.S. Federal Reserve would like to have. With unemployment running at 50-year lows, one would think there would some signs of it in the U.S. economy. . .but to the chagrin of the central bank, there is not even a whiff.

Quote of the Day
“Rather than let the market adjust itself, government typically starts the process all over again with a new and larger ‘stimulus package.’ The more often this happens, the more ingrained become the distortions in the way people consume and invest, and the nastier the eventual depression. This is why I predict the Greater Depression will be … well … greater. This is going to be one for the record books. Much different, much longer lasting, and much worse than the unpleasantness of 1929-1946.” – Doug Casey, International Man

Chart of the Day

Chart note: We faithfully reproduced this chart developed by UK’s Colin Seymour in 2001. Posted originally at the USAGOLD website, Seymour’s chart on the 1929 stock market crash and the annotations that went with it caused quite a stir on the internet at the turn of the century and the early stages of gold’s secular bull market. It is still widely referenced and linked on the world wide web. We recently reposted the study as part of a site-wide upgrade to current internet presentation standards. It is as relevant to investors today as it was in 2001. Here is the link to the original article titled Pompous Prognosticators.