Miners Remain Undervalued Despite Gold’s Run

Miners Remain Undervalued Despite Gold’s Run By Joe Foster, for ETF Trends

Gold Reaches Another All-Time High

The strong gains of July carried on to early August. Gold reached an all-time high of $2,070 per ounce on August 6 amid U.S. dollar weakness and new lows in treasury yields. Gold then saw a sharp reversal and fell $207 over the following three trading days to an intraday low of $1,863 on August 12. The reversal was triggered by dollar strength, a move higher in interest rates and news of a Russian COVID vaccine. Gold had become over-bought in the past month, trading well above-trend, making it ripe for a correction. Once gold started to fall, momentum built as profit-taking set in and bullion exchange traded products saw their first redemptions since June. Gold recovered quickly and spent the rest of the month consolidating between $1,900 and $2,000 per ounce as the U.S. Dollar Index (DXY)made new two-year lows on August 31. Spot gold ended the month at $1,967.80 for an $8.06 (0.4%) loss.

Fed Shifts Inflation Target

U.S. Federal Reserve (Fed) Chairman Powell announced a significant shift in inflation targeting that will allow inflation to rise above the 2% target that the Fed has been trying to achieve for years. Aside from some volatility, gold did not react significantly to the announcement, as it has little bearing in the current markets. Pandemic-related deflation is the dominant economic force and it looks to be here for a while. An August 7 study by the Aspen Institute finds that without intervention, as many as 17 million U.S. households (40 million people) risk eviction by year-end. An August 29 Wall Street Journal article details a new wave of layoffs washing over the U.S., reflecting a shift in corporate thinking toward a more protracted crisis. New York is being transformed into a second-tier city mired in budget shortfalls and rising gun violence. The New York Times figures one-third of New York’s small businesses may be gone forever.

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Rory Hall, The Daily Coin and Gospel News Network. Beginning in 1987 Rory has written over 1,400 articles and produced more than 500 videos on topics ranging from the precious metals market, economic and monetary policies, preparedness as well as geopolitical events. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver, Gold Seek, SGTReport, and a great many more. Rory was a producer and daily contributor at SGTReport between 2012 and 2014. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Dr. Warren Coates and Peter Schiff, to name but a few. Don't forget to visit The Daily Coin and Gospel News Network to enjoy some of the best economic, precious metals, geopolitical and preparedness news from around the world.