U.S. economy deteriorating with alarming speed

This morning it was reported that over 6.6 million Americans have filed for unemployment last week, taking the total to over 17 million since the start of the COVID–19 pandemic. The Unemployment rate in the U.S. could be as high as 13%, this according to some economists, including former Fed chairwomen Janet Yellen.

The Federal Reserve has been moving quickly to aid those in need. Today they announced additional new lending programs which will inject economic relief of an additional $2.3 trillion dollars.  This includes a $600 billion “Main Street” lending program to help small and medium size businesses recover.

"We are moving with alarming speed from 50-year lows in unemployment to what will likely be very high, although temporary, levels. All of us are affected, but the burdens are falling most heavily on those least able to carry them." Chairman of the Federal Reserve, Jerome Powell said in interview today.

According to the Washington Post, “The Fed’s latest actions go even further than what the central bank did during the Great Recession. The Fed is directly buying debt from large corporations and states, a level of support it hasn’t tried before. There’s widespread worry that some companies and households will go bankrupt during the pandemic because they will not be able to borrow money in time, but the Fed has taken large and unprecedented steps to keep as much credit flowing as possible.”

Both U.S. stocks as well as gold and silver traded higher today as market participants ran to both risk-on and the safe haven asset class.

The Dow gained 285 points today taking that indicex to 23,719.37. The S&P 500 gained 1.45% in trading, and the NASDAQ composite gained .78%.

As of 4:47 PM EST gold futures, basis the most active June contract is currently trading up $53.70, and fixed at $1738.20. This is a net gain of almost 3% on the day. Spot gold prices continue to lag behind futures creating a wider spread between the two. Gold futures traded to a new historical high this year as it briefly touched upon $1754.50, before backing off, taking gold to highs not seen for over seven years.

Silver futures are also trading dramatically higher today, with net gains of just over 4%. Currently silver futures are up by $0.61, and fixed at $15.81.

With the coronavirus affecting such a large segment of the global population as we celebrate both Passover and Easter it is our wish at the gold forecast that all of us may stay focused on the light at the end of the tunnel, with the knowledge that we will endure and overcome this global pandemic. Wishing you all stay healthy, physically, mentally and financially.

Wishing you as always good trading,