August Economic Update - Gold, Trump wins again, Australian Recession

Welcome to September!

Highlights From RBC on Gold · Possible catalysts for gold to continue to run include a weakening USD as it may be both overvalued and losing its reputation as a safe haven currency, sustained low interest rates as assets flow out of fixed income, and inflation. · Headwinds the team are watching for include rising rates, positive developments around a vaccine, and a rally in small-cap names which historically have been a sign of excessive optimism – these risks are low in the near-term but the team is following them. · The team believes current valuations in gold equities are reasonable, especially in the mid-cap space. There is currently more stimulus and debt in the economy than the last crisis, and the previous gold rally lasted nearly 3 years and gold equities rose more than 300%, making a case that we could be in the early days of a gold rally.

Election risk November's election is now the biggest event risk in the history of the U.S. stock-volatility futures market as investors are pricing elevated chances of a delayed or inconclusive outcome. Traders looking for protection on equity market, interest rate and dollar-yen positions are facing hefty fees to hedge their positions. With 62 days until the vote, Democratic nominee Joe Biden is leading Trump by eight points in the latest national poll. 

Post Secondary Education?

This short article for students who are ready to withdraw funds from an RESP.

Australia Recession Australia fell into its first recession in nearly 30 years as the nation battles a resurgence of Covid-19. Gross domestic product plunged 7% from the first three months of the year, the largest fall since records dating back to 1959. Elsewhere, U.S. cases and hospitalizations continued to ease in hot spots such as California and Texas, while warnings grew of new outbreaks across America’s Midwest. In this region, Sweden is ready to impose stricter rules on local communities in the event of sudden Covid-19 outbreaks.

COVID Deaths as percentage of population

AND Finally...JP Morgan predicting Trump Win??? Say it ain't so! Rising odds of Trump victory.