Precious metals continue to shake off all headlines that I would expect to support gold and the precious metals complex. The combination of Hong Kong citizens protesting in the streets and uncertainty over what Russia will do to calm concerns over their currency and capital markets has had no impact, as the strength of the USD remains the driving force as prices continued the sharp sell-off yesterday despite the impressive demand the physical market has seen throughout the month of September.
With the sell-off yesterday, gold dropped almost 6 percent for the month, while the USD Index rallied by almost 4 percent. Yesterday also saw silver fail to hold $17.00, as prices revisited levels last seen in 2010. Overnight, physical demand was particularly heavy throughout Asia, perhaps in reaction to the fall in prices and the protests in Hong Kong. Today brings us the first trading day of the fourth quarter and a sharp early sell-off in equities. This brings back into focus the possibility of an equity bubble bursting this quarter which would likely see portfolios of all sizes reallocating with precious metals being a major beneficiary of the rotation.
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