Market Updates

These last few weeks have acted as a nice reminder that the fundamentals of the gold trade can span beyond the idea of Quantitative Easing and the US Federal Reserve.

The market quietly awaited the August jobs report Friday with premarket trading and futures markets remaining little unchanged ahead of the reading.

The date was August 9th, 1974 when Richard Nixon resigned the Office of the President of the United States.

Six years after a recession that rocked the global financial system, there is no shortage of excitement, especially during a season that is known as the “doldrums of summer.”

"Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."

‒ Mario Draghi

"The economic recovery has continued at a moderate pace in recent quarters despite the strong headwinds created by federal fiscal policy,” was Ben Bernanke’s opening line when delivering what is expected to be his final testimony before the often unpredictable US congress on Wednesday.

Investors who have been salivating for reassurance regarding the outlook for more monetary stimulus from Federal Reserve Chairman Ben Bernanke got their wish this last week.

One thing has been consistent with the selloff in gold. There's always a really good story to explain why the market reacted the way it did.

The biggest rumour or perception though that QE created was that it would lead to rampant inflation. Such expansive monetary policy would lead to the demise of the US dollar, and one of few assets able to hold value was gold.

It’s hard to avoid the topic of how the emerging market funds have been absolutely hammered in the last month over the premature fear of interest rates starting to creep higher in the United States.

The US economic recovery is really at a crossroads in terms of which direction it will head next.

This week, the Organization for Economic Cooperation and Development (OECD) revised down their forecast for global economic growth.

The movement witnessed in all asset classes on Wednesday more than adequately exemplifies the US Federal Reserve’s influence on financial markets.

If the downward pressure on the loonie from the selloff in commodity prices wasn’t convincing enough to send it below 98 cents, the flat inflation numbers reported Friday morning was definitely the icing on the cake.

As Canadians, we cannot help but shiver a little bit when Stanley Druckenmiller, the man that “broke the bank of England” with George Soros, calls for an end to the commodities supercycle.

It seems surprising, given that Mr. Carney did not even complete his full term at the Bank of Canada that our federal government would imply by this maneuver for a switch in policy direction.

If anything is evident from the United States first quarter GDP numbers it is that confidence has returned to their economy.

Demand for taking delivery of physical gold and silver has multiplied thanks to institutional investors and investment banks ditching their positions in the asset class.

There is a lot to make of the action in the gold market over the last week. This selloff though, can really be attributed to three main events, and the rationale behind them will continue to influence the market in the months to come.

Societe Generale released a special report this week that’s caught the attention of many commenting on what they dub “The End of the Gold Era.” Further, their bearish outlook has the price of gold to finish the year at $1,375 per ounce.