We’re in a world of seemingly stark inconsistencies – confounding incongruences.
Record stock prices, unprecedented household wealth, and incredible technological innovation. At the same time, society is resentful, deeply divided, and insecure.
There is a sense of foreboding in social and political circles today. Of course, this is to be expected as we’re anticipating a contentious election.
Let’s take a look at where gold and silver stand:
The price of gold is down at $2,739 on Tuesday. Last week it hit a high at $2,790. It continues to flirt with the $2,800 mark.
The price of silver is down at $32.79 on Tuesday. At one point last week, it was up to a high of $34.80. Silver keeps testing the $35 level.
The S&P 500 is steady at around 5,779, parked just below the 5,800 at this level pending the US elections.
The Equities Party On
The sense of foreboding is NOT yet reflected in the financial markets.
Looking back in time, there are parallels between the current environment and the “Roaring Twenties.” Both periods were remarkable for a confluence of monumental technological advancement, financial innovation, credit and speculative excess, and catastrophic boom and bust dynamics.
Will the stock and bond market catch down to match the dour political sentiment? The hate-filled reaction on November 5th by 50% of the electorate?
Foreboding Treasurys
While the cracks may not be showing yet in equities, the Treasury market is under meaningful pressure. Ten-year Treasury yields jumped 14 bps last week to a four-month high of 4.38%. Yields are up 76 bps since September 17th, the day before the Fed slashed rates 50 bps – with yields now 50 bps higher in 2024.
The MOVE (bond market volatility) Index rose another five last week, to a one-year high 133. The rates market closed Friday pricing a 3.65% December 2025 Fed funds rate – up another 13 bps this week and 70 bps higher since the end of September.
Gold Gleams Brighter
There’s a growing global skepticism of the status quo. Trigger recession or depression, and you begin to see the confidence dominoes begin to fall one after the other.
Gold is now a beneficiary from global discontent.
For the last decade, the BRICS have been griping. With the most recent meeting in Russia, BRICS are now planning and angling to demote the dollar. Bitcoin was also discussed at the most recent BRICS meeting.
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