Top Stories This Week: Gold Price Bounces Back, US Debt Hits US$31 Trillion

- YouTubeyoutu.be

The first week of the third quarter treated gold relatively well — after falling to US$1,622 per ounce on September 28, the yellow metal bounced back, rising to around US$1,725 on Tuesday (October 4).

Gold finished the five day period lower, coming in at US$1,695, but its uptick has soothed worried investors.

I heard this week from David Erfle of Junior Miner Junky, who shed some light on gold's interesting recent price activity. He said that last week was filled with bearish sentiment, and he was prepared to see the precious metal drop to US$1,550. That would have been a 50 percent retracement after gold's doubling from late 2015 to August 2020.

Of course, we now know that didn't happen — according to David, gold was buoyed by turmoil in Europe, and this allowed it to get back over the crucial US$1,675 level. Here's why he thinks that price point is important:

"(Gold) had tested (US$1,675) four, five times, and when it finally broke, it put a lot of people into the bear camp, which overloaded the boat even farther. That's what happens with the gold sector — it does this every single time there's a major bottom. You have a false move first to get everybody out of the boat, and then when most everybody's out that's when it reverses."

Click here to watch the full interview with David; he also shares how he's approaching gold stocks right now.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.