Monthly Archives: August 2017

Gold gets strong bounce off $1300 level today, silver in tandem

Good day today. Gold up $14 at $1321 per ounce.  Silver up 18¢ at $17.55 per ounce. Gold mounted a defense of the $1300 level in overseas trading that carried over to day time trading in the United States. (first chart below)  Silver traded in concert with gold.

The metals also closed out a strong month coming out of the annual summer doldrums with a solid move to the upside (second chart below.)  For the month of August, gold is up 4% (+$53.00) and silver is up 5% (+87¢).

For more detailed information, please scroll below. 

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The Bear Market For Gold is Officially Over, Next Stop $1,370 – Expert Analyst Says

KitcoNews/Daniela Cambine/08-31-17

Gold prices ended Thursday with good gains and were poised to finish with a bullish 10-month high close. One technical analyst is so convinced by the metal’s chart action that he is calling for the official end of the bear market. “I thought the move up to $1,331 was healthy, and the pullback was actually healthier. I’m not concerned about the dollar anymore, gold is becoming a new currency for a lot of people,” said Todd ‘Bubba’ Horwitz, the founder of “I am officially calling the bear market for gold officially over -$1,370 will be our next major stop,” he said.

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Gold poised to end the month of August with a 4.3% gain; +14.9% YTD.

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Strike gold on your smartphone

USAGOLD’s mobile market monitor

Our mobile pages are one of the hidden gems at the USAGOLD website.  Principally designed as a service to our busy clientele, Google picked up on several pages ranking them one to three under mobile searches. Those search listings refer a steady stream of new visitors daily. It is very user friendly and delivers up-to-the minute prices, news and opinion  on the gold market.

We welcome your visit to our mobile hub page. From there you can navigate to the pages that interest you when you are on the go. . . . .

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The Daily Market Report: Gold’s Dip Below $1300 Attracts Fresh Buying

USAGOLD/Peter Grant/08-31-17

Gold ticked briefly below 1300.00 in overseas trading, before renewed buying interest emerged. The yellow metal is now up nearly 1% on the day; $20 off the intraday low.

Geopolitical tensions continue to ratchet higher: The U.S. conducted live-fire bombing runs on the Korean Peninsula yesterday, along with South Korean and Japanese planes. Some of the planes were reportedly nuclear capable B1s from Andersen Air Force base on Guam.

Treasury Secretary Mnuchin contends that the debt ceiling will be raised, but also warned that Hurricane Harvey relief legislation could further trim the already small September window for Congress to resolve the impending issue.

The Freedom Caucus is already warning that the debt ceiling increase should not be attached to any Harvey relief legislation. Some in the GOP are talking about linking Medicaid reform to the debt ceiling. That would assuredly be a nonstarter for Democrats, as would any link to tax reform that favors corporations or the wealthy.

This is going to be a contentious fight any way you slice it, for a White House that has already lost considerable post-election momentum. A potential default and/or a government shut down hangs in the balance. The next 4-weeks are going to very interesting indeed, with significant implications for risk appetite.

Jim Rickards posited an interesting theory yesterday on Mnuchin’s recent visit to Ft. Knox. “The answer may lie in the fact that the Treasury is running out of cash and could be broke by September 29 if Congress does not increase the debt ceiling by then. But the Treasury could get $355 billion in cash from thin air without increasing the debt simply by revaluing U.S. gold to a market price,” Rickards told Kitco News’ Daniela Cambone.

U.S. gold reserves remain on the books at $42.22 per ounce. If Treasury were to mark those reserves to market — like the ECB does for example — they could buy themselves another 4-months or so.

The downside of doing that is it gives considerable legitimacy to a reserve asset that both Treasury and the Fed are probably loathe to bolster. However, a default may be the greater of two evils.

Posted in Daily Market Report |

Mnuchin says Harvey aid package could impact debt ceiling

MarketWatch/Robert Schroeder/08-31-17

Treasury Secretary Steven Mnuchin said Thursday that aid for Hurricane Harvey relief could impact the timing of the need to raise the debt ceiling. Mnuchin said Sept. 29 remains the date by which Congress should raise the borrowing limit, but added that Treasury’s spending will be affected in September by an aid package. “There could be some impact of a couple of days,” he said.

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Gold up nearly $10 on the day as dollar gives back earlier corrective gains

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Jim Rickards Says There is Much More Behind Mnuchin’s Fort Knox Visit and Germany’s Gold Saga

KitcoNews/Daniela Cambone/08-30-17

Between Germany getting its gold back and Treasury Secretary Steve Mnuchin’s visit to Fort Knox, lots of “weirdness” is going on in the gold space, this according to best-selling author Jim Rickards.

“Last week featured two unusual stories on gold – one strange and the other truly weird,” Rickards, the author of the New York Times bestseller Currency Wars, said on Wednesday.

… “The answer may lie in the fact that the Treasury is running out of cash and could be broke by September 29 if Congress does not increase the debt ceiling by then. But the Treasury could get $355 billion in cash from thin air without increasing the debt simply by revaluing U.S. gold to a market price.”

U.S. gold is currently officially valued at $42.22 per ounce on the Treasury’s books versus a market price of $1,285 per ounce.

PG View: Revaluation of America’s gold reserves would result in a new “official” legitimacy to the yellow metal and would probably light a fire under the market.

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U.S. NAR pending home sales index -0.8% to 109.1 in Jul, below expectations of +0.3%, vs negative revised 110.0 in Jun.

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Chicago PMI unchanged at 58.9 in Aug, above expectations of 58.0.

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It Won’t Be A Parabolic Rise But $10,000 Gold Is Coming – Rickards

KitcoNews/Daniela Cambone/08-30-17

The bigger picture, the one I’m looking at, is that gold hit an interim low on Dec 15 and it’s been grinding higher ever since. It’s one of the best-performing assets of 2017,’ he told Kitco News. Gold prices rallied to 11-month highs this week as North Korea launched a missile over Japan and even if tensions seem to have cooled off, pushing the safe-haven metal back down to around $1,312.70 an ounce, Rickards is not quite convinced. ‘People seem to have very short attention spans. I’m just looking down the road and you can see the war is coming,’ he said.

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Gold Is Winning New Fans

Bloomberg/Ranjeetha Pakiam/08-30-17

After nosing above $1,300, gold is winning new fans as tepid U.S. inflation anchors Federal Reserve policy and President Donald Trump’s growth agenda risks running into the sand.

The metal should trade above that level in 2018 as the dollar weakens and the Fed sticks to just two rate hikes, in December 2017 and then March, according to Luc Luyet, a currency strategist at Pictet Wealth Management, a unit of the Pictet Group, which managed $500 billion as of the end of June. Luyet’s “constructive” call is based on inflation lagging the Fed’s 2 percent target and Trump’s administration failing to deliver any significant fiscal boost.

“Given the fact that inflation should remain relatively low, we do not expect the Fed to be capable of doing much more than one hike in 2018,” Geneva-based Luyet said in an interview this week. “The dollar should be penalized next year by the weaker growth outlook and by the less active Fed, so we would expect the dollar to gradually weaken and that should support gold.”

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Morning Snapshot: Gold underpinned, shrugging off dollar gains

USAGOLD/Peter Grant/08-31-17

Gold continues to consolidate near the high end of this year’s range, shrugging-off further gains in the dollar. Clearly, political and geopolitical risks continue to underpin the yellow metal.

U.S., South Korean and Japanese warplanes staged a live-fire bombing exercise on the Korean Peninsula yesterday. It was a direct response to North Korea’s missile launch that flew over Japan earlier this week. The sabers continue to be rattled.

President Trump attempted to reinvigorate the push for tax cuts and tax reform before year-end. Emphasis seems to be on a corporate tax cut, but apparently the President is going to leave the details to Congress.

Congress is going to have a full slate when they return next week from the month-long summer recess. And everything is going to be hotly contended, with default and a government shutdown hanging in the balance.

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U.S. personal income +0.4% in Jul, above expectations of +0.3%, vs unch in Jun; PCE +0.3%, on expectations of +0.4%.

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U.S. initial jobless claims +1k to 236k in the week ended 26-Aug, just below expectations of 237k.

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Gold better at 1308.88 (+1.56). Silver 17.40 (+0.008). Dollar higher. Euro lower. Stocks called higher. U.S. 10-year 2.13% (unch).

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Next target Guam, North Korea says

CNN/Brad Lendon & Joshua Berlinger/08-30-17

North Korea’s launch of a missile over Japan was a prelude to more military operations directed at the American territory of Guam, North Korean state media warned Wednesday.

The country’s state-run Korean Central News Agency reported leader Kim Jong Un presided over the dawn launch Tuesday of the “ultra-modern rocket system,” the first missile ever fired from the capital Pyongyang.

…The North Korean launch was “the first step of the military operation of the (North Korean military) in the Pacific and a meaningful prelude to containing Guam,” state media said.

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The Daily Market Report: Gold Consolidates Recent Gains as Dollar Corrects

USAGOLD/Peter Grant/08-30-17

Gold is consolidating above the $1300 level, showing good resilience in the face of a stronger dollar today. Political and geopolitical risks continue underpin the yellow metal.

The dollar index is up more than 1% from yesterday’s 32-month low. Today’s better than expected revision to Q2 GDP is helping to buoy the greenback, but another rate hike this year remains a long-shot. September remains off the table and even with the GDP beat, Fed funds futures put the probability of a December hike at just 36.4%.

Given the broader fundamental picture, the bounce in the dollar is likely to prove short-lived. If corrective upticks are met with further selling interest, given the breach of a key support level yesterday, a significant downside extension into the mid-80s is possible.

That would push gold to more new highs as well. The yellow metal continues to garner additional support from ongoing saber-rattling by the U.S. and North Korea.

On the heels of this week’s missile shot over Japan, the DPKR state-run new agency declared it a “a meaningful prelude to containing Guam.” The suggestion being that the launching of a missile toward Guam is still very much on the table. President Trump tweeted this morning that “talking is not the answer” to dealing with North Korea.

The President pledged early in the month to respond with “fire and fury” if North Korea threatened the U.S. One has to imagine that firing missiles toward Guam would be a very direct threat, warranting some type of response.

Domestically, the President is going to try and reinvigorate his campaign pledge for tax cuts and tax reform. With Congress returning next week after the summer recess, their agenda is going to be pretty packed with Texas obviously deserving of immediate attention. Our policymakers will have their work cut out for them, coming up with a budget before the end of the fiscal year and addressing the debt ceiling before the Treasury runs out of money at the end of September.

Posted in Daily Market Report |

Gold slips on stronger dollar; geopolitical risks support

Reuters/Arpan Varghese/08-30-17

Gold slipped on Wednesday, pressured by gains in the dollar amid perception of a brief lull in tensions over North Korea, but prices of the yellow metal remained supported as safe-haven demand was buoyed by expectations that geopolitical risks could persist.

“The dollar strength is taking some shine off the yellow metal,” said Naeem Aslam, chief market analyst, Think Markets.

…North Korea said on Wednesday it had conducted a test of an intermediate-range ballistic missile (IRBM) to counter U.S. and South Korean military drills.

The United States will not allow North Korea’s lawlessness to continue and it is time for Pyongyang to recognise the “danger they are putting themselves in” as the world is united against them, U.S. Ambassador to the United Nations Nikki Haley said on Tuesday.

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Morning Snapshot: Gold dips on GDP beat, but underpinned by political/geopolitical risks

USAGOLD/Peter Grant/08-30-17

Gold dipped briefly on this morning’s Q2 GDP beat. However, downticks have been limited thus far amid persistent political and geopolitical risks.

U.S. Q2 GDP was revised up to 3.0%, above expectations of 2.8%, versus a 2.6% preliminary read and 1.2% in Q1. This may lead to a rise in December rate hike expectations, but September remains off the table.

President Trump tweeted this morning that “Talking is not the answer!” when it comes to North Korea. It’s unclear at this point what the President thinks might work, but this might easily be interpreted as a threat of military action.

The dollar has rebounded after setting 32-month lows yesterday, which is weighing on gold. However, the correction in the greenback will likely be sold as a selling opportunity. If the dollar remains in a downtrend, it will continue to provide a tailwind for gold.

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U.S. Q2 GDP revised up to 3.0%, above expectations of 2.8%, vs 2.6% preliminary and 1.2% in Q1.

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Gold easier at 1307.99 (-1.13). Silver 17.38 (+0.002). Dollar higher. Euro lower. Stocks called better. U.S. 10-year 2.14% (+2 bps).

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Gold tallies third-straight session gain to settle at 11-month high

MarketWatch/Myra P. Saefong & Sara Sjolin/08-29-17

Gold prices extended their climb into a third session in a row Tuesday, settling at the highest level in almost a year, as a North Korean missile launch over Japan’s airspace rekindled geopolitical tensions in the region and sparked a flight to haven assets.

…The advance came after North Korea fired a ballistic missile across northern Japan, in what Japanese Prime Minister Shinzo Abe called an “unprecedented, grave and serious threat that seriously damages peace and security in the region.”

Tensions between Pyongyang and the U.S. and its allies—including Japan—have been running high most of the summer, stoking fears of a potential nuclear clash. President Donald Trump has previously said the U.S. would react with “fire and fury” if Pyongyang stepped up threats against the U.S. and its allies.

“There is increasing expectations for President Trump to counter react to the North Korean aggression, which may further propel the prices upwards,” said Mihir Kapadia, CEO at Sun Global Investments, in a note.

Posted in Today's top gold news and opinion |

The Daily Market Report: Gold Sets Another New High for the Year in Earlier Trade

USAGOLD/Peter Grant/08-29-17

Gold jumped to another new high for the year, spurred by the latest North Korean provocation and a corresponding rise in risk aversion. While a rise in U.S. consumer sentiment tempered gains, the current fundamentals remains broadly supportive.

North Korea fired a ballistic missile that passed over Japan, further amplifying already high geopolitical tensions. Japan’s Abe called it “a most grave threat.” U.S. Ambassador to the U.N. Nikki Haley warned that North Korea has “violated every single U.N. Security Council resolution that we’ve had and so I think something serious has to happen.” President Trump says that “all options are on the table.”

While the North Korean tensions have been dominating the headlines recently, let us not forget geopolitical tensions remain elevated in the middle east as well:

A senior Israeli official warned the Russian government that if Iran continues to extend its reach in Syria, Israel will bomb Syrian President Bashar Assad’s palace in Damascus, according to reports in Arab media. — Jerusalum Post

The geopolitical tensions and the post-storm recovery in Texas are going to take up a great deal of time when policymakers return to the Beltway next week after their summer recess. This may make finding some common ground on the budget and the debt ceiling even more difficult.

Congress has a very small window between September 5th and the 29th to resolve some pretty serious issues. The agenda is now even more packed, which increases the risks that not everything gets done in time.

The dollar index broke a critical support level today at 91.92, which has some rather bearish longer term implications. There is very little in the way of additional support until well into the 80s.

I’ve mentioned this before, but it’s worth repeating today: The dollar is clearly no longer a safe-haven currency. Investors would rather buy yen as a haven, the currency of a country that was just overflown by a North Korean missile.


Posted in Daily Market Report |

With Gold Rallying, Analyst Say $1,400 Is Its Next Stop

KitcoNews/Allen Sykora/08-29-17

Some analysts are suggesting gold’s rally could carry all the way to $1,400 an ounce since a “perfect” atmosphere has developed, including low interest rates, a weak U.S. dollar, a pickup in physical buying and continued geopolitical tensions.

…An overnight leg higher came after North Korea reportedly fired a missile that flew over Japan before landing in the sea, thereby prompting safe-haven demand due to renewed geopolitical tensions, analysts said. However, they emphasized that other catalysts are also at play, including the euro’s move above $1.20 for the first time since early 2015.

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Gold retreated into the range after consumer sentiment beat expectations, but political/geopolitical risks and weak dollar remain supportive.

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U.S. consumer confidence rose to 122.9 in Aug, above expectations of 120.0, vs negative revised 120.0 in Jul.

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U.S. Case-Shiller home price index for 20-cities, +0.7% (nsa) in Jun, below expectations of +0.8%, vs 0.9% in May.

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Gold hits more than nine-month peak after N.Korea missile test

Reuters/Eric Onstad/08-29-17

Gold jumped to its highest since November on Tuesday as investors bought bullion as insurance against falling prices of other assets after North Korea tested a missile over Japan.

“Funds and traders are filling their boots with gold at the moment and so far that’s justified,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“No matter where you look you can’t point your finger at anything that’s gold negative. Stocks are coming off hard, the dollar has weakened and now also against the yen, which has been the missing link, while bond yields are also taking a beating.”

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Morning Snapshot: Gold pushes higher on geopolitical tensions and weak dollar

USAGOLD/Peter Grant/08-29-17

Gold has extended to the upside in the wake of yesterday’s convincing breach of the $1300 level. The yellow metal has gotten an additional boost from heightened geopolitical tensions after North Korea fired a ballistic missile that flew over Japan.

President Trump has warned that “all options are on the table.” Japan’s PM called this significant escalation of tensions “a most grave threat.” This has created a risk-off environment, pushing stocks lower and boosting the yen, Swiss franc, Treasuries and of course gold.

The dollar index has fallen through key support at 91.92, reaching levels not seen since January 2015. The implications for the greenback are quite bearish, which in turn bodes well for gold.

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