The price of gold seems to have been in a rut lately; however, experts say that could soon be changing. The yellow metal didn’t rally as expected after September’s disappointing jobs report. While that data was not ideal for Fed officials, who need a good report to begin bond tapering, it could spell out soon-to-be higher prices and good news and for gold and gold investors. In other news, Goldman Sachs has lowered its forecast for our nation’s economy for the second time in two months.
Kitco News/Anna Goulbova
‘Bad news is good news for gold,’ but why is the price stuck?
With gold unable to deliver a rally despite a disappointing U.S. September employment report, analysts weigh in on gold’s sticky price levels.
The U.S. September jobs report surprised on the downside with just 194,000 positions added versus the expected 500,000. This is a big miss considering that Federal Reserve Chair Jerome Powell needed “a reasonably good report” to begin tapering as soon as November.
“We had a big miss on the jobs number. The bad news is good news for gold. That’s because the market believes the Fed can’t get as aggressive next month with tapering or future rate hike timeline,” RJO Futures senior market strategist Frank Cholly told Kitco News. “It comes down to the Fed not being in a position to take away the punch bowl just yet.”
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CNN Business/Julia Horowitz, CNN Business
Goldman Sachs gets even gloomier on the US economy
Goldman Sachs (GS) is becoming increasingly pessimistic about the US economy as coronavirus support from the government phases out and consumer spending remains on an uncertain path.
What’s happening: Over the weekend, the Wall Street bank downgraded its forecast for America’s economic growth, which is closely monitored by the investment community. Goldman Sachs now expects the economy to expand by 5.6% this year, compared to a previous estimate of 5.7%. In 2022, growth is projected to expand by 4%, down from 4.4%.
It’s the second time Goldman Sachs has revised its 2021 forecast lower in two months.
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NBC News/Teaganne Finn
Yellen warns of ‘catastrophe’ if Congress doesn’t handle debt ceiling issue
Treasury Secretary Janet Yellen said there is an “enormous amount at stake” after the Senate approved only a short-term extension of the debt ceiling, again setting up potential for default in December if Congress is unable to make another deal.
“A failure to raise the debt ceiling would probably cause a recession and could even result in a financial crisis. It would be a catastrophe,” Yellen said Sunday on ABC’s “This Week.”
The Senate last week passed a bill to extend the debt limit through early December, temporarily ending a partisan standoff before the government’s deadline of Oct. 18 to avoid a default. The House, which had been scheduled to be out this week, will return Tuesday and is expected to pass the measure.
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