Gold

There are a number of key fundamental issues afoot in the markets today. Among them are the confusing new jobs data; the persistent softness in gold; the seeming hitting of a ceiling by oil prices, and the free fall of the British pound due to what is now being called “hard Brexit.”

New weekly unemployment claims came in lower than analysts had forecast, generating more sentiment that says interest rates will be rising as soon as politically expedient.

The services sector accelerated in September, reaching its highest level in 11 months, according to a closely followed report released Wednesday.

The Institute for Supply Management’s services index rocketed – and that’s no overstatement – to 57.1% in September from 51.4% in August. Any reading over 50% indicates improving conditions.

It was a long way down. Gold fell $43 per ounce in morning trade in New York, or more than 3.25%. Silver followed suit and then some. It fell more than 5.00%. The question now becomes whether physical buyers will take advantage of the plunge and step in to buy at these low levels.

A thought to open October on The Gold Forecast: October is the most volatile month.

With the growing realization that Deutsche Bank’s problems may be more than temporal but less than fatal, the U.S.-listed stocks of the megabank rocketed up 14.5% today. Needless to say, that pulled equities up along with it. The three major New York indexes were up between 0.80% and 0.90% each.

The U.S. dollar strengthened vs the euro in U.S. trading as Deutsche Bank sold off dramatically after approximately ten hedge funds downgraded the German megabank. In afternoon trading the U.S. listed Deutsche stock is off 6.5%.

Gold slipped a bit more today in the face of comments from the Federal Reserve and one data point that could point more strongly in the direction of a rate hike in December. Equities moved higher on oil price spike, but we feel they are probing new tops and the pullbacks we are seeing are “technical” in the broad sense of the word.

The general assessment of at least the markets is that Hillary Clinton “won” last night’s debate. That sent the U.S. dollar higher and gold prices lower. It also helped equities rise, although there the story is more nuanced.

It seems unreasonable to believe that investors and traders are worriedly waiting on the outcome of tonight’s debate, but many analysts are saying it is so. We’re serious doubters.