As the week and the month come to an end today, we see fresh new highs in the gold futures and fresh new contract lows in the Dollar Index. At the conclusion of the FOMC Meeting this week, Chairman Powell made it crystal clear that the Fed is committed to using its full range of tools to help our economy recover during this health crisis. The Fed is not even thinking about when they may raise rates. None of this was a “surprise” but everyone wanted to hear it. This is helping to support gold…dovish Fed and dollar weakness.

Furthermore, Gold ETF purchases so far this year have already eclipsed the last three years combined. Meanwhile, due to the collapse of the global economy, physical demand naturally has been weak from the likes of China and India. As those economies begin to recover, one could expect demand for physical gold to return to normal levels.

Ups and downs along the way should be expected. Nothing should just go straight up. A healthy bull market rebounds after corrections. It’s my opinion that we are in the early stages of the next big commodity bull market. It starts with gold. One day, as a result of everything the Fed has been doing for far too long, inflation will awaken and commodities will be the “place to be”.

Gold Oct ’20 Daily Chart
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Frank J. Cholly

Senior Market Strategist
Frank is a swap registered trader who brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.
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