Gold continued to consolidate last week, falling to its annual low of $1080 once again.  The main culprit was the renewed strength of the U.S. dollar, combined with the assumption that the Federal Reserve will raise interest rates by a small amount (0.25%) in December. In the meantime, the World Gold Council announced on Thursday that global gold demand rose 8% in the third quarter.  Global investment demand rose 27%. 

Gold fell from $1108 to $1085 in a few minutes last Friday morning after the monthly jobs report came out showing a robust 271,000 new jobs created in October, thereby giving the Federal Reserve the needed ammunition they can cite to raise short-term interest rates by 0.25% at their next Federal Open Market Committee (FOMC) meeting in mid-December.  This news lifted the U.S. dollar and depressed gold in U.S. dollar terms. Gold’s sharp decline may be a gross over-reaction, but the assumption of the press and most mainstream investors is that dollar-based interest-bearing instruments will outperform gold as rates rise. 

Gold fell from $1108 to $1085 in a few minutes last Friday morning after the monthly jobs report came out showing a robust 271,000 new jobs created in October, thereby giving the Federal Reserve the needed ammunition they can cite to raise short-term interest rates by 0.25% at their next Federal Open Market Committee (FOMC) meeting in mid-December.  This news lifted the U.S. dollar and depressed gold in U.S. dollar terms. Gold’s sharp decline may be a gross over-reaction, but the assumption of the press and most mainstream investors is that dollar-based interest-bearing instruments will outperform gold as rates rise. 

Gold consolidated to $1140 last week after the Federal Open Market Committee (FOMC) met and issued a “hawkish hint” that they might raise interest rates a quarter-point at their December meeting.  Although 0.25% is a trivial amount and it is way overdue (we’ve been at near-zero short-term interest rates since late 2008), that “hint” pushed gold down.  However, the economic news has been downbeat and the Fed will not likely raise rates if job growth and GDP growth remain anemic over the next few weeks. 

Gold consolidated to $1140 last week after the Federal Open Market Committee (FOMC) met and issued a “hawkish hint” that they might raise interest rates a quarter-point at their December meeting.  Although 0.25% is a trivial amount and it is way overdue (we’ve been at near-zero short-term interest rates since late 2008), that “hint” pushed gold down.  However, the economic news has been downbeat and the Fed will not likely raise rates if job growth and GDP growth remain anemic over the next few weeks. 

Gold consolidated to $1140 last week after the Federal Open Market Committee (FOMC) met and issued a “hawkish hint” that they might raise interest rates a quarter-point at their December meeting.  Although 0.25% is a trivial amount and it is way overdue (we’ve been at near-zero short-term interest rates since late 2008), that “hint” pushed gold down.  However, the economic news has been downbeat and the Fed will not likely raise rates if job growth and GDP growth remain anemic over the next few weeks. 

Gold is up $60 so far in October. Some of the reasons include (1) a weaker dollar, (2) a slow-growth economy, which will likely lead the Fed to delay any interest rate increase when they meet this week; (3) unrest in the Middle East; (4) rising demand worldwide, including Wall Street and seasonal buying for jewelry demand in India and elsewhere; (5) More central bank buying in Russia, China and elsewhere.

Gold is up $60 so far in October. Some of the reasons include (1) a weaker dollar, (2) a slow-growth economy, which will likely lead the Fed to delay any interest rate increase when they meet this week; (3) unrest in the Middle East; (4) rising demand worldwide, including Wall Street and seasonal buying for jewelry demand in India and elsewhere; (5) More central bank buying in Russia, China and elsewhere.

Gold is up $60 so far in October. Some of the reasons include (1) a weaker dollar, (2) a slow-growth economy, which will likely lead the Fed to delay any interest rate increase when they meet this week; (3) unrest in the Middle East; (4) rising demand worldwide, including Wall Street and seasonal buying for jewelry demand in India and elsewhere; (5) More central bank buying in Russia, China and elsewhere.

Gold rose to $1185 (and silver hit $16) last Thursday (October 15) for the first time in nearly four months, since June 22.  From its low of $1080 in late July, gold is up over $100.  Gold’s strongest rise came in the first half of October, when it rose from $1114 (on October 1) to $1185 (October 15).