Short and Sweet

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Gold in six easy lessons

1. Don’t buy it because you need to make money; buy it to protect the money you already made.

2. Don’t look at price as a barrier; look at it as an incentive.

3. Don’t buy the paper pretenders; buy the real thing in the form of coins and bullion.

4. Don’t fall prey to glitzy TV ads; do your due diligence instead.

5. Don’t allow naysayers to divert your interest; allow yourself the right to protect your interests as you see fit.

6. Don’t forget the golden rule: Those who own the gold make the rules!

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Posted in Short and Sweet, Today's top gold news and opinion |

Why central bank buying has the gold market guessing

Bloomberg Businessweek/Rupert Rowling/10-28-2018

“The gold market was caught by surprise when two of eastern Europe’s biggest economies, Poland and Hungary, made rare purchases in recent months. Why central banks buy gold is often a major topic of market speculation. Were Poland and Hungary signaling worries about economic conditions? Were they cutting exposure to the dollar? Or maybe hedging against potential European Union sanctions?”

USAGOLD note:  How about “all of the above”. . . plus a few incentives not mentioned.  The image is from a Hungary central bank information release on its recent 28-tonne acquisition during the first two weeks of October.  Central bank gold acquisitions are rarely, if ever, announced in advance, so there is no way to know how much of this sort of thing is going on around the world at any given point in time.


Repost from 10/28/2018

Posted in Today's top gold news and opinion |

Goldman predicts commodities will soar in 2019

Bloomberg/Ranjeetha Pakiam/11-26-2018

“’Given the size of dislocations in commodity pricing relative to fundamentals — with oil now having joined metals in pricing below cost support — we believe commodities offer an extremely attractive entry point for longs in oil, gold and base,’ analysts including Jeffrey Currie said in a report.”

USAGOLD note:  Currie believes the rebound could begin as early as this week at the G-20 conference in Buenos Aires. Oil moved higher in overnight trading following last week’s declines.


Repost from 11/26/2018

Posted in Today's top gold news and opinion |

A telephone call from an old client and friend

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‘Gold shone with the placid certainty of received tradition’

“I had the happy occasion recently of receiving a telephone call from an old client and friend – a physician safely retired near the sea and alongside one of the South’s oldest golf clubs. It was good to hear from this student of the markets – one of life’s steady and thoughtful practitioners.  Back at the turn of the century, Doc foresaw much of what would happen economically in the United States and purchased what he considered enough gold to see him through it.”

[For the rest of Doc’s story we invite you to visit this link.]

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Posted in Announcements, ClientInsights, Today's top gold news and opinion |

DMR-Jobs drop, gold pops; stocks face ‘psychological and algorithmic leverage’ and ‘computer herding’

DAILY MARKET REPORT

The jobs number dropped and gold popped in early Friday trading – up $7 at $1245.  Silver is up 9¢ at $14.60.

Gold’s recent stability – we hesitate to call it strength at this juncture – should be traced directly to dovish remarks emanating from the Fed. A perceived agreement on oil production among members is also adding to gold’s appeal today as are concerns about the trade negotiations between the U.S. and China – particularly in light of the arrest of Huawei’s chief financial officer, Meng Wanzhou, daughter of the company’s founder. “After Ms. Meng’s arrest,” says Financial Times this morning, “the deadline for progress looks like a timebomb.” Meanwhile, the president, as if nothing unusual just happened, tweets this morning that the trade talks with China “are going very well.”

On another page in the Financial Times, columnist Gillian Tett makes an attempt to explain the wild swings in financial markets, a trend that seems to be snowballing.  She passes along an interesting observation from Seth Klarman, founder of the Blaupost hedge fund. “In 2008,” he says, “we had massive disguised [debt] leverage.  Now we have less financial leverage, but there is psychological leverage.”  Is that another way of saying that the markets are on the verge of panic?

Klarman goes on to warn about “algorithmic leverage” and “computer herding” – problems we have written about on these pages for years. [Link to the full editorial] Ms Tett, who has written with distinction about the markets and their tendency toward crisis for a good many years, ends with the observation that the propensity toward wild swings rather than a sudden, full-out crash gives “seasick investors opportunity to jump ship.” That is a course of action worth pondering as we head deeper into what could be an eventful closing month to the year.

Jumping ship, we will point out, is one thing, establishing a solid portfolio hedge is another.  The first without the second may turn out to be an empty exercise.

Quote of the Day
“Our central bank monetary-led boom has made debt replace wealth for a long time. That’s not sustainable, of course. (We are ‘mining’ our soil for short-term gain.) We’ll see a return to the significance of productive stuff again I think, and that even includes farming – maybe especially farming. And the Midwest has a pretty good track record with productive stuff. Hard assets will matter again. But of course, I sound ridiculous even saying such things. Like a grumpy old grandpa.” – Mark Spitznagel, Universa Investments (as quoted by columnist, P.J. O’Rourke)

Chart of the Day

Chart note:  After all is said, as of yesterday, gold is down just less than 2% on the year.  The last twelve months have been a struggle for the yellow metal but not as much the annus horribilis some would have us think. Predictions for 2019 have begun to show up in the financial media and most surprisingly strike a positive chord. Recently published observations from ABN-Amro’s Georgette Boele are a case in point.  “Gold prices,” she says, “have declined so far this year. But 2019 and 2020 should be positive again because we expect a lower dollar, lower US Treasury yields, a recovery of the Chinese yuan and higher jewellery demand. Speculators are expected to cut their substantial short positions and gold prices should rise to above the 200-day moving average. We keep our year-end target for 2019 at USD 1,400 per ounce.”

Posted in Daily Market Report, Today's top gold news and opinion |

US becomes net oil exporter for first time in decades

Financial Times/Gregory Meyer/12-6-2018

“The US exported more petroleum than it imported for the first time in decades last week, marking an astonishing if momentary reversal from its longtime status as the world’s largest oil importer.”

USAGOLD note:  Whoudathunk? That’s the good news.  The bad news is the U.S. ran its largest trade deficit in a decade despite exporting more oil than it imported.

Chart courtesy of TradingEconomics.com

Posted in Today's top gold news and opinion |

Dovish Fed hike seen by J.P. Morgan as markets flash ‘slowdown’

Bloomberg/Cecile Gutscher/12-6-2018

“I would expect a dovish rate hike” at the Dec. 18 to 19 meeting, Michele said. “I would expect some clarity that we’re near the end” of the indicative tightening trajectory.”

USAGOLD note: I read an update yesterday that suggested we might have zero rate increases in 2019.  Any indication the Fed is leaning in that direction would likely have a profound effect on markets, including gold.

Posted in Today's top gold news and opinion |

Gold Outlook 2019: Higher gold prices ahead

ABN-AMRO/Georgette Boele/12-6-2018

“We are of the view that the US dollar and US Treasury yields have peaked. We also expect that US economic growth will peak this quarter. During the next two years, we expect lower US economic growth and lower 2y and 10y US Treasury yields. We expect the Fed to hike in December 2018 and one more time in 2019, some time during the first half. Going forward, the 2y US Treasury yields will probably rise in tandem with inflation expectations. So real yields will likely not rise. All these factors support our view that the US dollar has peaked and will weaken in 2019 and 2020. Therefore, we expect gold prices to rally in 2019.”

USAGOLD note:  One of Europe’s biggest banks, the Netherlands’ ABN-Amro, weighs in on gold for 2019 with a strong endorsement for the future.  It sees gold at $1400 by year-end the resulting from a confluence of factors covered briefly at the link above.


Image:  Collection of Netherlands 10 guilder gold coins available at our Online Order Desk or by calling 1-800-869-5115 x100.  Start the New Year right by making a solid addition to your investment portfolio in these increasingly uncertain times.

Posted in Today's top gold news and opinion |

Why buy gold now? Because I don’t know

SovereignMan/Simon Black/12-5-2018

“And right now, banks are buying up gold hand over fist. Central banks currently hold 20% of all the gold ever mined—33,000 metric tons. And JPMorgan Chase says they’ll buy another 650 tons this year and next. Why? Gold is for the I don’t knows. And right now, there are a LOT of I don’t knows.”

USAGOLD note:  For all of life’s uncertainties, particularly those involving financial markets – for all the I don’t knows – a stash of gold and silver coins and bullion covers many bases. Simon Black offers a solid, quickly-read rationale at the link above.

Posted in Today's top gold news and opinion |

The psychological bubble that has been propping up the U.S. economy is starting to implode

TheEconomicCollapseBlog/Michael Snyder/12-2018

“So it isn’t as if those that are preparing for the worst are being irrational. It is just that when large numbers of people all start to move in the same direction, it has a very powerful effect. We witnessed this in the stock market in recent years when people just kept buying stocks even though they were massively overvalued. The collective belief that there was money to be made in the stock market became a self-fulfilling prophecy which pushed stock prices up to absurd heights. But now that process is beginning to reverse as well, and ultimately the unwinding of that bubble will be quite painful.”

USAGOLD note:  A line of thinking worth probing at the link above. . . . . . .

Posted in Today's top gold news and opinion |

DMR Update

(USAGOLD – 12-6-2018) – The Dow Jones Industrial reversed most of an 800-point decline in the the last hour of trading the result of a Wall Street Journal report that the Federal Reserve is “considering whether to signal a new wait-and-see mentality” on interest rates.  The rate increase for December is likely to be implemented, but the March meeting might result in a pause.  The gold market was closed at the time the WSJ released the article.  It reopens at 4pmMT and we will see then if the Fed’s new position has any immediate effect.

The gold market has been in a minor uptrend since the Fed chairman spoke at the Economic Club of New York on November 28th and indicated the possibility of the Fed taking a more dovish approach to interest rates.  Today’s Wall Street Journal article appears to be a deliberate move to drive home the point and reverse persistent stock market weakness.  We will see over the next several hours and days if there is a collateral effect in other markets, including gold and the dollar, and if the stock market reversal has any staying power.

Posted in Today's top gold news and opinion |

Taleb says world more fragile today than in 2007

Bloomberg/Video Interview with Eric Schatzker/10-31-2018

“Nassim Nicholas Taleb, scientific advisor at Universa Investments, discusses the factors causing global fragility, hidden liabilities in global markets, and what he sees as safe trades in the current market. He speaks with Bloomberg’s Erik Schatzker on Bloomberg Markets.”

USAGOLD note:  When asked how it all plays out and if there is anything that he sees as safe in a global financial system on the verge of another crisis,  Taleb says he owns “some gold, which I am confused about, and land. . .” He does not elaborate on why he is confused about gold.  Taleb, as most of you already know, made his mark in the financial world by predicting the 2007-2008 crisis and writing the now famous book, The Black Swan – The Impact of the Highly Improbable.


Repost from 11/5/2018

Posted in Today's top gold news and opinion |

The glistening project: Why some investors are looking at gold again

Seeking Alpha/Steve Land/Franklin Templeton Investments/11-21-2018

“For some investors, increasing exposure to gold has been a knee-jerk reaction to bouts of heightened financial market volatility. Franklin Equity Group’s Steve Land says there’s more to gold than that. And he explains why he’s positive about both the prospects for gold and for gold equities. The return of volatility to global financial markets in October has prompted a resurgence of interest in gold after a quiet summer.”

USAGOLD note:  Business has picked-up at USAGOLD as well . . . .


Repost from 11/21/2018

Posted in Today's top gold news and opinion |

U.S. trade deficit reaches 10-year high

Chart courtesy of TradingEconomics.com

USAGOLD note: Unwelcome news for both the White House and financial markets against the backdrop of U.S.-China trade negotiations . . . . . . . The dollar index is down sharply this morning.

Posted in Today's top gold news and opinion |

Daily Market Report

No DMR today.
Please check back though during the course of the day.
We will update here as events take shape.

QUICK UPDATE BELOW

Posted in Today's top gold news and opinion |

Oil falls nearly 5% on concern over size of OPEC output cut, Asian and European markets take hit, Dow primed to open 400 points lower this morning

UPDATE:  OPEC negotiations in Vienna

Financial Times/Anjil Raval and David Sheppard/12-6-2018

“Oil prices fell almost 5 per cent on Thursday to below $59 a barrel as Saudi Arabia signalled that producers were working towards a deal to cut output that could fall short of market expectations.”

UPDATE:  Global stock markets

Bloomberg/Samuel Potter/12-6-2018

“U.S. equity futures tumbled alongside stocks in Europe and Asia as concern resurfaced that trade tensions between the world’s two largest economies are far from resolved.”

Table courtesy of TradingEconomics.com

USAGOLD note:  The markets are reacting to the arrest in Canada and possible extradition to the United States of Huawei’s chief financial officer, Wanzhou Meng, in connection with violation of U.S. sanctions on Iran.  Bloomberg reports that “China promptly reacted with outrage.”  Gold’s reaction thus far is muted – down $2 at $1236.  Silver is down 11¢ at $14.37.


 

Posted in Today's top gold news and opinion |

Gold will rally 22% in 2019, outperform everything

Kitco News/Daniella Cambone/12-5-2018

“2019 will see the start of a new bull cycle for gold and push the metal up to $1,500 an ounce, said E.B. Tucker, director of Metalla Royalty & Streaming. ‘To make big money in this market, you have to see the cycles. Nothing changes. We’ve had three big cycles in gold since 2000 and we’re about to have another one,’ Tucker told Kitco News.”

USAGOLD note:  With this post, we launch the annual new year prediction festivities. . . . . . .For the rest of Tucker’s interview with Daniella Cambone please visit the link above.

Posted in Today's top gold news and opinion |

Big-money investors see the bull market ending in 2019 and another crisis in 5 years or less

CNBC/Jeff Cox/12-5-2018

“A survey of institutional investors show that 65 percent see a change coming, with the biggest threats being geopolitical tensions and rising interest rates, according to Natixis, which surveyed 500 managers of pension funds, endowments, foundations and the like. Respondents also included sovereign wealth funds and insurance funds. In addition to seeing the bull market stopping, they also anticipate the next financial crisis coming in one to five years.”

USAGOLD note:  The pros think the bear will be on the loose starting in 2019. Cox in this article reminds us that the Fed, just a week ago, warned that ‘a particularly large’ plunge in market prices is possible if risks materialize like those the professional investors cited in this survey.  The 800-point drop of two days ago in short may have been a prelude to bigger things to come.


Image by © Francis C. Franklin / CC-BY-SA-3.0 [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)]

Posted in Today's top gold news and opinion |

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The road to confetti is long and winding

“Does the deployment of helicopter money not entail some meaningful risk of the loss of confidence in a currency that is, after all, undefined, uncollateralized and infinitely replicable at exactly zero cost? Might trust be shattered by the visible act of infusing the government with invisible monetary pixels and by the subsequent exchange of those images for real goods and services? . . .  To us, it is the great question. Pondering it, as we say, we are bearish on the money of overextended governments. We are bullish on the alternatives enumerated in the Periodic table. It would be nice to know when the rest of the world will come around to the gold-friendly view that central bankers have lost their marbles. We have no such timetable. The road to confetti is long and winding.” – James Grant, Grant’s Interest Rate Observer

Dr. MoneyWise says. . . .Some think it takes an advanced degree in economics to understand the merits of a diversification in gold and silver when all it takes is a little common sense.  Common sense ownership of unencumbered metal saved the skeptical saver in the time of the French assignat inflation in 1789, the nightmare German inflation in 1923, the global bank collapses in 1932, the American stagflationary breakdown in the 1974 and Venezuela’s inflation in 2018 – even though those episodes span almost 250 years.  As old Ben Franklin once said: “A change of fortune hurts a wise Man no more than a change of the Moon.”

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Posted in Dr. Moneywise, Today's top gold news and opinion | Tagged |

China’s ex-central bank governor optimistic on trade truce

Bloomberg/John Follain and Flavia Rotondi/12-5-2018

“China’s former central bank governor Zhou Xiaochuan says he is optimistic after a weekend trade truce with the U.S., saying it highlights a mutual desire to tone down tensions. The agreement between the world’s two largest economies ‘shows that both sides have a desire to de-escalate trade differentials,’ the ex-head of the People’s Bank of China said Wednesday in a Bloomberg TV interview in Rome.”

USAGOLD note:  A hopeful note from a respected player on the international scene. . . . This is the same PBoC governor who has spoken favorably in the past about gold and its role in China’s economy.


Image: Zhou Xiaochuan, former governor, Peoples Bank of China

Posted in Today's top gold news and opinion |

Physical gold buying to remain ‘solid’ in 2019 – WGC

MiningWeekly/Marleny Arnoldi/12-5-2018

“The most important component for near-term price performance, however, will be linked to the activity of investors – whether driven by strategic or tactical reasons. These investment flows, stemming primarily from the US and European markets, and with China becoming increasingly important, will likely be driven by macroeconomic factors such as perceptions of risk and the direction of interest rates, as well as by momentum and the positioning in the gold market – especially in the US.”

USAGOLD note:  That quote is from the World Gold Council’s John Reade who sees a continuation of trends in the second half of 2018 carrying over to the new year.

Posted in Today's top gold news and opinion |

Greenspan sees signs of stagflation, threats to U.S. economy

Bloomberg/Video Interview with David Rubenstein/11-14-2018

“Former Federal Reserve Chairman Alan Greenspan tells David Rubenstein that rising deficits and debt are already showing signs of eroding U.S. growth and that he sees indications of stagflation — a stagnant economy saddled with rising inflation.”

USAGOLD note:  The Maestro weighs-in on the current state of economic affairs in the United States. . . . .Gold proved to be an excellent hedge against the last stagflationary episode in the 1970s early 1980s.


Repost from 11/17/2018

Posted in Today's top gold news and opinion |

A $30 billion computer is about to start selling stocks

ZeroHedge/Tyler Durden/11-14-2018

“A $30 billion computer, run by UBS’ wealth management which oversees $2.4 trillion in capital and entrusted by some of the world’s richest, is poised to underweight stocks as real money and systematic investors pare risk amid flagging bull-market momentum. According to Andreas Koester, head of global asset allocation at UBS Wealth, the quantitative-investing platform is close to trimming its equity holdings to 20% from a neutral 50%, a shift that would lead to an avalanche of selling as hundreds of billions in stocks are forced to find a new home.”

USAGOLD note:  Thought-provoking.  What happens when computers start telling each other to sell – at hair-trigger speed? Someone pulls the plug?  Durden says “there will be no human intermediation to stop the algo-precipitated liquidation.”


Repost from 11/14/2018

Posted in Today's top gold news and opinion |

Why gold is money

Casey Research/Doug Casey/11-23-2018

“There’s nothing magical about gold. It’s just uniquely well-suited among the 98 naturally occurring elements for use as money… in the same way aluminum is good for airplanes or uranium is good for nuclear power.  There are very good reasons for this, and they are not new reasons. Aristotle defined five reasons why gold is money in the 4th century BCE (which may only have been the first time it was put down on paper). Those five reasons are as valid today as they were then.”

USAGOLD note:  Casey delivers the essential argument for gold as money in the age of paper currency.


Image:  Aristotle as depicted by the German artist Johann Jakob Dorner the Elder (1741-1813)

Posted in Today's top gold news and opinion |

DMR–Gold takes pause after three-day rally, stock market gets needed breather

DAILY MARKET REPORT

Gold took pause this morning after a three-day, $25 rally that took it over the $1240 mark. It is now trading at $1238.50 and level on the day.  Silver is down 2¢ at $14.55. The dollar is also trading sideways as the stock and bond markets suspend trading for the day for the funeral of former president George H. W. Bush.

After yesterday’s chaotic nearly 800 point stock market rout, a breather might be just what the stock market needs. Then again, there is the possibility that a day of reflection will give rise to even more powerful animal spirits (to resurrect an old, but still lingering, allusion).  The yuan is down a bit but generally holding steady even with China coming-off as hesitant on commitments it reportedly made at the Trump-Xi dinner.

Trading in bonds is having what can only be described as a profound effect on stocks in recent sessions. Much, it seems, hangs on how the relationship between various maturities plays out, i.e., inverted yields and their perceived dangers.  What transpires will likely affect the value of the dollar and consequently gold – not to speak of future monetary policy.  It is a time for current and would-be gold owners to be vigilant if not proactive.

Quote of the Day
“I’m fond of saying how crazy things get near the end of Bubbles. Convinced this is History’s Greatest Bubble, I’ve been anticipating a pretty astonishing variety of ‘crazy.’ Watching this all unfold with increasing trepidation, I sense an important line has been crossed. It’s time to retire ‘crazy’ – find a replacement that conjures up something more foreboding – more disturbing. And markets, well, they’re seemingly fine with it all; at times almost giddy. And that’s the fundamental problem: Dysfunctional markets continue to promote incredibly risky policy behavior – the polar (bear) opposite of imposing discipline.” – Doug Noland, Credit Bubble Bulletin

Chart of the Day

Chart courtesy of St. Louis Federal Reserve [FRED], Board of Governors, IBA

Chart note: With the US dollar the centerpiece of interest the past several weeks, we thought it appropriate to post the long-term overlay chart of the gold price and the major-currency version of the US Dollar index. As you can see, the dollar has been in a secular, long-term decline against other major currencies since the early 1970s when the U.S. abandoned gold-backing for the currency and the world switched to free-floating gold and currency prices. Despite all the talk of a strong dollar and how Treasury secretaries historically back the concept, the reality is the opposite – a weak dollar when measured against its major competitors over the long term. In the end, unencumbered ownership of physical gold coins and bullion, as this chart amply illustrates, has proven to be an effective defense in the on-going process.

Posted in Daily Market Report, Today's top gold news and opinion |

Gold to copper: Metals look upward with potential peak greenback

Bloomberg Intelligence/Mike McGlone/12-3-2018

“Metals should be primary beneficiaries of an imminent greenback peak, with normalization in U.S. stock-market outperformance, Federal Reserve tightening near a finish and the trade-weighted broad dollar approaching multiyear highs. Though the dollar tops the list of this year’s best performing major assets, gold and copper show divergent strength. . . .Indications from precious metals, notably gold, offer a setup that’s similar to natural gas before its big rally.”

USAGOLD note:  McGlone’s argues a strong gold market in concert with a general rise in the commodities complex – rallying from a “compressed range.” (Please see below.)

Natural gas chart courtesy of TradingEconomics.com

Posted in Today's top gold news and opinion |

The many traps of paper gold

Sound money for a sound society/Claudio Grass/12-3-2018

“As the historic bull market is approaching its end, with volatility increasing and investor anxiety climbing, interest in gold is sure to be soon renewed. After stock markets revert to an uncertain, bearish stage, a seismic shift towards safety and capital preservation is bound to take place. Nervous investors looking for shelter in a time-tested safe haven will inescapably try to build up a defensive precious metals position. However, investing in gold can be a complicated affair for those who tend to overlook the small print. In a market full of “gold-backed” ETF products and pseudo-physical gold solutions, there are several traps to look out for.”

USAGOLD note:  Claudio Grass goes on to identify and explain those traps and the differences between owning paper gold and the real thing.

Posted in Today's top gold news and opinion |

President Trump tweets. . . . .

“We are either going to have a REAL DEAL with China, or no deal at all – at which point we will be charging Tariffs against Chinese product being shipped into the United States.  Ultimately, I believe, we will be making a deal – either now or into the future. . . .China does not want tariffs!”

Posted in Today's top gold news and opinion |

Treasury yields continue slide with traders wary of ‘curve inversion’

CNBC/Thomas Franck/12-4-2018

“[Raymond James’ Kevin] Giddis added that with all eyes on inflation, the Labor Department’s report on the employment situation on Friday will be key for Fed officials. The government’s November jobs numbers will also include an update on average hourly earnings, which can be used to see how fast wages are rising across the U.S. economy.”

USAGOLD note:  The consensus opinion seems to be that a flattening or inversion in the yield curve is bad for the economy – an indicator making the economic maze that much more difficult to navigate.

Posted in Today's top gold news and opinion |

Trade pledge slows stock sell-off

Bloomberg/Samuel Potter/12-5-2018

“Global markets have been left reeling after Tuesday’s steep sell-off in New York, but nerves appear to be steadying after China’s Commerce Ministry said Beijing will start to quickly implement specific items where there’s consensus with the U.S. and will push forward on trade negotiations within the 90-day “timetable and road map.”

USAGOLD note:  The stock and bond markets are closed today to mark the national day of mourning for former President George H.W. Bush.  Metals and energy, however, will be in regular session.

Posted in Today's top gold news and opinion |