No DMR today (6/15/2021)
Will update later though at the Top Gold News and Opinion page if anything of interest develops.


 

Gold drops sharply in early trading
Fed conclave, summer doldrums loom

(USAGOLD – 6/14/2021) – Gold dropped sharply in early trading with this week’s Fed conclave looming, the summer doldrums settling in, and the latest assault on $1900 having run out of momentum. It is trading at $1852 down $27 on the day. Silver is down 34¢ at $27.67. Even with today’s weakness taken into account, gold is still up almost 11% from March’s double bottom; silver is up almost 16%. Adrian Day, the long-time, widely-followed market commentator, sees two major factors driving gold during the past few months – inflation expectations and the new Basel 3 banking rules to be implemented by the end of the year.

“Inflation is positive for gold,” he says in an advisory posted at the Investor Ideas website,” but even more positive is an inflation that the Fed refuses to acknowledge and will not fight. Another major factor potentially contributing to higher gold prices the last few months has been buying from banks ahead of the implementation of the Basel III rules…The implementation of these rules is bullish for gold, though many commentators have, in my view, wildly exaggerated the potential impact…Since banks have until the end of the year to come into full compliance, this buying could continue, and once this bullion is purchased, it will not be readily sold.”

Chart of the Day

Gold price performance in top global currencies
(Five year, in percent)

overlay line chart showing gold's performance in top currencies since June2016

Chart note: The collapse of fiat currencies’ purchasing power, writes market commentator Alasdair Macleod in a detailed analysis posted at Gold Eagle, “is unlikely to echo the great European inflations of the 1920s, because to a large degree commerce subsisted on the alternative of gold-backed dollars, instead of local currencies. Today, the collapse of the dollar will mean there is unlikely to be any alternative currency available, because they are all tied to the dollar.” Gold’s strong, synchronous performance in the world’s top currencies over the past five years supports Macleod’s point. It is up 44.56% in U.S. dollars, 57.8% in India rupee, 47.14% in British pounds, 40.35% in Chinese yuan, 34.65% in European euros, and  52.23% in Japanese yen. In the event of a global breakdown in fiat currencies, concludes Macleod, “anyone who does not plan to get hold of some physical gold and silver with a high degree of urgency could end up sinking with nothing but valueless fiat currencies.”

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