Some light relief for gold bugs as gold edged up for the third day in a row and now trades at $750.70 in early trading on the Sydney Stock Exchange. One swallow does not make a summer, but it is encouraging to see a slight improvement in gold prices. The Gold Bugs Index (HUI) also improved today gaining 13.93%, although it still languishes at an astonishingly low level of 172.69.
The US Dollar was having a reasonable day but then dropped in late trading from 87.6 to close at 86.2 as the chart above from INO.com shows.
The DOW also put in an extraordinary day by gaining 889.35 points or 10.88%.
These are very unusual and very volatile times with the markets out foxing everyone as they race off in one particular direction and then back again on the latest sound bite. The presidential election is now right on top of us so just maybe some semblance of order will prevail once this event is behind us. When the dust settles the problem of the mass production of paper money will still be there along with its inflationary tail wind.
Tomorrow the Federal Reserve will make its pronouncement on the expected rate cut which is widely anticipated to be 50 basis points taking it down to a mere 1%. A move such as this would normally have sent the dollar lower so it will be interesting to see if the flight to cash neutralizes the rate cut.
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