As Congress clashes over borrowing and debt, gold is likely to beat stocks

[libertybele]

As Congress clashes over borrowing and debt, gold is likely to beat stocks

Gold could receive a boost in coming days, while stocks could suffer, as investors focus on a matter they have mostly overlooked: political brinksmanship in Congress over raising the U.S. government’s debt ceiling.

There have been five prior occasions over the past decade in which similar political gridlock brought the federal government to the brink of financial default, according to the Bipartisan Policy Center. Leading up to those occasions, gold GC00 rose 3.4% on average while the S&P 500 SPX lost 2.3%.

Yet financial markets so far have largely ignored this brewing confrontation. But investors’ attention could shift quickly in coming days as the Aug. 2 deadline approaches for raising the U.S. federal debt ceiling. U.S. Senate Minority Leader Mitch McConnell has already indicated that no Republicans will agree to do so.

Debt rating agency Fitch in mid-July indicated that the outlook is negative for its rating of U.S. government debt, in part because of “a deterioration in governance.” If the agency follows through on this threat, it wouldn’t be the first time that political gridlock over the debt ceiling was the cause. Standard & Poor’s did exactly that in August 2011, and in the month leading up to the resolution of that showdown, gold prices rose 10.4% while the S&P 500 fell 6.9%................

https://www.marketwatch.com/story/as-congress-clashes-over-the-federal-debt-gold-is-likely-to-gain-while-stocks-get-hit-11627634793?mod=home-page

[libertybele]

August could be a 'terrific' month for gold, says Jim Cramer

The last month of the summer is looking "terrific" for gold and "tough" for the S&P 500, said CNBC's Jim Cramer.

"The charts, as interpreted by the legendary Larry Williams, suggest that August could be a tough month for the S&P 500, but a terrific month for gold," Cramer said Monday. "Given the big picture backdrop right now, that wouldn't surprise me one bit."

And it is the seasonality which makes all the difference, the 'Mad Money' host explained.

"Williams is long gold for precisely the same reason he's worried about the S&P: The seasonal pattern," Cramer said.

One thing Cramer pointed to is the build-up of the debt ceiling worries that come after the two-year suspension of the debt ceiling expired at the end of July. "Remember, during the original debt ceiling debacle a decade ago, the stock market broke down and ... gold did great," Cramer noted. ..............

https://www.kitco.com/news/2021-08-03/August-could-be-a-terrific-month-for-gold-says-Jim-Cramer.html

[IsailedawayfromFR]

August could be a 'terrific' month for gold, says Jim Cramer

The last month of the summer is looking "terrific" for gold and "tough" for the S&P 500, said CNBC's Jim Cramer.

"The charts, as interpreted by the legendary Larry Williams, suggest that August could be a tough month for the S&P 500, but a terrific month for gold," Cramer said Monday. "Given the big picture backdrop right now, that wouldn't surprise me one bit."

And it is the seasonality which makes all the difference, the 'Mad Money' host explained.

"Williams is long gold for precisely the same reason he's worried about the S&P: The seasonal pattern," Cramer said.

One thing Cramer pointed to is the build-up of the debt ceiling worries that come after the two-year suspension of the debt ceiling expired at the end of July. "Remember, during the original debt ceiling debacle a decade ago, the stock market broke down and ... gold did great," Cramer noted. ..............

https://www.kitco.com/news/2021-08-03/August-could-be-a-terrific-month-for-gold-says-Jim-Cramer.html

Not if you believe a major bank instead of a loudmouth stock picker

Gold Stalls as UBS Tells Buyers ‘Get Out’ Before Losses Worsen
https://finance.yahoo.com/news/gold-holds-gain-amid-slump-021510046.html