The price of gold could reach $ 5,000 if Trump continues to get involved in the Fed, says Goldman Sachs

The White House clearly wants its own people in the Federal Open Markets Committee. Trump and his allies asked for criminal investigations into the president of the American federal reserve, Jerome Powell (accused of having deceived the Congress) and the Fed governor, Lisa Cook (accused of false complaints on mortgage documents). He tried to shoot Cook. He openly insulted Powell and clearly indicated that he would replace him with someone more politically aligned with his desire for lower interest rate.

With investors who are no longer able to count on the independence of the Fed, this changes the game for security assets, Samantha Dart de Goldman and his team told customers.

“A scenario where the independence of the Fed is damaged would probably lead to higher inflation, higher long-term rates (drop in bond prices), a drop in stock prices and an erosion of the reserve currency status of the dollar. On the other hand, gold is a value store that was not based on institutional trust,” she wrote.

DART has planned a “tail risk scenario” of $ 4,500, but noted that it would not require a very big change of demand to push gold by more than $ 5,000. The Gold ETF market represents only 1% of the size of the market for treasury bills, she said. And, vice versa, “we estimate that if 1% of the private market of the US treasury was to go into gold, the price of gold would reach nearly $ 5,000 / Toz, assuming everything else constant.

In the meantime, on the job market …

ADP will report private payments today. This survey is only a tranche of the labor market and is not considered a reliable guide to the economy of jobs as a whole, but a low number is expected given the opening number yesterday (Jolts). “Job offers have dropped more than expected at 7.2 million, the increase in dismissals at 1.8 million is more worrying,” said Ing Francesco in a note this morning. “The Hawkish dissident of the Fed (and the president of the chair), Christopher Waller, said that the weekly reports received from the ADP showed continuous deterioration. Consensus is for a slowdown from 104K to 68k today.”

Non -agricultural payrolls—The big job number – results tomorrow.

Fed Cut is cooked: The CME Fedwatch tool gives a basic interest rate drop in September of almost 98% this morning. The only disagreement among Wall Street analysts is the number of cuts that the Fed will deliver and when.

“The president of the Atlanta Fed, Raphael Bostic, said on Wednesday that the increase in inflation presented a higher risk for the double mandate of the federal reserve that a single work assessment would be appropriately reflected in the increasing risk for the Fed employment objective. A short -term phenomenon, “RBC Peter Schaffrik told customers.

At the Deutsche Bank, Jim Reid and his team noted that the governor of the Fed, Christopher Waller, “reiterated his expectations that the Fed should cut at the next meeting and has favored several discounts in the coming months.

Here is a snapshot of markets in the world this morning:

• Future S&P 500 increased by 0.22% this morning. The index increased by 0.51% during its last negotiation session.
• Stoxx Europe 600 increased by 0.61% at the start of negotiations.
• The FTSE 100 of the United Kingdom increased by 0.23 at the start of negotiations.
• Nikkei 225 from Japan increased by 1.53%.
• CSI 300 from China fell by 2.12%.
• South Korea Kospi increased by 0.52%.
• Nifty 50 of India was flat before the end of the session.
• Bitcoin Swear at $ 110.7,000.