The recent sell-off in gold was followed by a sell-off of the gold producers as the chart below depicts:
The reason for this is that the President of the United States, Joe Biden, decided to give the chairman of the Federal Reserve, Jerome Powell a further four years as chairman.
It was thought that as Jerome Powell was a President Trump nominee this extension would not be granted and instead Lael Brainard a Democrat would be his replacement. However, this did not happen, and it is generally thought that Miss Brainard would have been more dovish than Mr. Powell which in turn would be advantageous for gold.
The uptrend is still intact, and I have no reason not to be bullish on the precious metals sector and will continue to look for bargains in order to increase our exposure to future gains.
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