In anticipation of more hawkish rhetoric out of the Jackson Hole central banking confab, the markets are tumbling today.

Only two assets are bucking the trend….

August 22, 2022

Dear Fellow Investor,

I see a figurative sea of red as I look down the list of stocks and assets on my computer screen this morning.

Only two “assets” are splitting this Red Sea — the U.S. dollar and U.S. Treasury yields.

As you can no doubt imagine, gold is being hit along with the U.S. stock market and other risk-on assets like crypto. Interestingly, however, silver is essentially flat.

The driver of these moves lower, of course, is Fed policy. The central bank’s rhetoric and determination to continue hiking rates has been sending more shivers through the market recently, and the prospect of Jerome Powell’s Jackson Hole speech on Friday morning is turning those shakes into full-blown convulsions.

As I write, the major stock indices are down well over 1% (with the Nasdaq pushing a 2% loss), the Dollar Index has leaped over 109 and the 10-year Treasury yield has popped over 3%.

Those are not good metrics for gold, which is currently not being viewed as a safe haven by Wall Street traders. The metal is down about $10.

As you can see, this trend is putting the late-July bottom at risk. If the current market view of a Fed determined to continue tightening into a recession persists, it’s likely that gold will at least trace out a double bottom. Or worse, continue below $1,700.

I remain confident that a reckoning with the soaring cost of financing the federal debt is coming, probably sometime in October or November.

I’ll save more-detailed commentary on that subject for tomorrow, when we’re going to host an extraordinary webinar…

As I’ve noted, the Fed has a choice now of either fighting inflation or recession, and it may not be able to do either.

I’m excited about tomorrow’s webinar, because we’re going to explore the limited options facing the Fed and the compelling repercussions for the markets offered by each.

And my co-panelists will include two great friends of mine: Adam Taggart of Wealthion (and one of the best interviewers around today) and Danielle DiMartino Booth of Quill Intelligence (a veritable “Fed whisperer” thanks to her years of experience working inside the central bank).

I urge you to CLICK HERE to sign up for this invaluable webinar now.

All the best,

Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference