by Alasdair MacLeod
Gold and silver sold off this week, with gold falling $28 from last Friday’s close to trade at $1873 in European trade this morning. Silver lost $1.25 over the same period to trade at $23.34. Prices came under pressure from a flight from risk assets into the perceived safety of the dollar. And the euro fell after Ms Lagarde, head of the ECB, admitted yesterday that the Eurozone economy was likely to weaken further and that the ECB was planning further stimulus measures.
Meanwhile, the US stimulus, which we all know is coming, is delayed until after the US presidential election next Tuesday. Further dollar strength arose from reports that US GDP was up 33.1% in the third quarter. Our next chart shows the trade-weighted index, which is heavily biased towards a weak euro.