AGE's Gold Commentary

AGE Gold Commentary is our regular report analyzing trends in precious metals and rare coins. We monitor domestic and international markets and extrapolate from our 30 years in metals to place current events into a hard asset perspective. View archives.

9/23/2024: Fed puts $3,000 gold in sight

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Greetings!

Last Friday, New York spot gold closed above $2,600 for the first time ever, setting a record high near $2,620 and putting $3,000 gold in sight. Gold bullion has now risen 27% this year and set new all-time highs in six of nine months. We think it's just the start.

What is driving the latest leg of this astonishing rally? In a word, the Fed. The central bank cut interest rates by a whopping 50 basis points last week, the first reduction since 2020 and the biggest in 16 years. It's just the fourth time ever that an easing cycle has begun with a 50-point cut. All the others were during severe economic crises. Yet Chairman Powell, in his press conference, stressed that the economy remains "healthy."

What has changed? The Fed's focus. Its dual mandate is to maintain price stability and full employment. With inflation ebbing back towards 2%, the Fed is now pivoting to the job market, which has been weakening for months. The size of the rate cut betrays the urgency of the pivot, despite Powell's assurances.

In this AGE Gold Market Commentary, we'll drill down on the changes in the labor market that have provoked this unusually big step from Fed and explain why projections for future cuts are more aggressive than just a month ago. We'll analyze the gold and silver markets to understand how they will be affected, and I'll outline how you can take advantage of this new and very bullish easing cycle.

You can also view this video on the AGE YouTube channel, which includes a transcript.

Sincerely,

Dana Samuelson
President