Fall 2023: gold price under pressure

03 October 2023 г. 5 minutes of reading

As a whole, the yellow precious metal has been losing almost 3% over the week. The reason for such a decline is the rally in U.S. government debt securities, which caused an outflow of funds from "gold" funds.

The sell-off is partly aided by technical analysts, who announced that quotes of the yellow precious metal formed a "death cross" when the 50-day fell below the 200-day moving average.

In general, the drawdown below the level of $ 1900 per ounce does not look critical yet - this has already happened more than once over the past year. This is first of all. Secondly, about the rally in the U.S. government debt. Right now, deficit spending alone is now a whopping 6% of GDP per year (financed through borrowing). That means that in just about eight years, the US deficit will grow to half of the country's GDP.

Since the national debt ceiling crisis, the US has been borrowing about $14 billion a day to cover the deficit. By 2033, Bloomberg predicts that deficit spending will rise to 7% of GDP.

It appears that waiting eight or even ten years won't be necessary. A massive debt crisis will hit the United States much sooner. This means that the sell-off of U.S. Treasury bonds will make the price of gold soar to new historical records.