Two persistent myths convince gold bears that the price of gold will remain low – a looming series of interest rate hikes from the Federal Reserve and the fact that gold did not rally during the last round of quantitative easing. Peter Schiff explains why both of these myths are ready to die following Friday's terrible job report. The silver price surged significantly higher on Friday's news, and Peter thinks it won't be long before gold also breaks out of its trading range. Investors are quickly running out of time to take advantage of these low prices.
(Video length 00:09:04)
Follow along with this full transcript:
It's Monday morning following Friday's release of jobs data that was much weaker than what the consensus forecast had been. Rather than creating more than 200,000 jobs and rather than revising upward the prior month to greater than 200,000 jobs, we got a number that was far below – not only for September but also for August. As a result, we had a rally in both the price of gold and silver. In fact, silver is gaining on or adding to Friday's rally. It's now trading at better than the three-month high, it's up about $0.40 an ounce this morning following more than a $0.70 per ounce gain on Friday.
Now, gold was up about $25 on Friday. It's actually down a buck or two last I checked here this morning. In fact, gold is still trapped in the trading range. It's really been trading between, let's say, the low $1100's and $1140, $1150, right now around $1137. But I do believe that ultimately, gold is going to follow silver's lead and break out to new highs. Really what's kept the metal range bound is you have the buyers at the lower end of the market who are steadily accumulating gold, who are long-term buyers and who understand the favorable long-term outlook for gold. And you have all of these speculators who are bearish on gold because of their false beliefs that the Fed is about to raise interest rates and that higher interest rates are going to be bearish for gold. I think they're wrong on both counts.
