Gold Price: Here Come The $100 Billion Monthly Deficits!

November 17, 2018

London (Nov 17)  The Treasury Department released the October 2018 Federal Deficit numbers last week and they were awful (unless you own gold). The monthly deficit for October was $100.5 billion. That’s up 58% from the $63 billion deficit recorded in October 2017. Spending rose 18% while receipts increased by only 7%.

As USAGold reports, the massive federal debt has made gold a superstar. As the graphic below clearly shows, few correlations in the financial markets are more consistent and true than the one between the size of the federal debt and the price of gold:

Note that October is just the first month of the government’s fiscal year 2019. So it’s still very early to project whether the annual budget deficit will reach $1 trillion after ending fiscal 2018 at $782 billion. However, the Congressional Budget Office projects the 2019 deficit will come in just shy of $1 trillion - at $981 billion - due to the impact of the Trump administration's Tax Cuts & Jobs Act combined with a big jump in new spending (mostly because of a huge jump in defense spending).


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