Monthly Archives: January 2019

COT reports

Just a short note to say that with the federal government back in business we will be updating our CFTC Commitment of Traders report this weekend. The Counting Pips analysis will be included. Please check back then at the link.

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Short and Sweet

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‘Wannabes’ and ‘Gonnabes’  not the real thing

“Gold has often been referred to as a relic. But from a behavioural perspective, this may also mean it is ingrained in our subconsciousness and related actions. Put differently, as long as humans remain tangible, it is likely that they maintain a desire to hold real and tangible assets. Very few companies on the US stock exchange, for example, are older than 50 years. By comparison, gold has existed for thousands of years and any gold coin or gold bar will most likely outlive any company and their stocks and bonds. Put together, it is unlikely that a company that sells claims on gold, such as a gold ETF, will beat physical gold’s longevity.” – Dick Baur, Professor of Finance, University of Western Australia (Why ‘digital gold’ won’t ever kill off the real thing)

Wannabe and gonnabe paper gold will never pass for history’s time-honored store of value – nor will it be mistaken for actual gold coins or bars stored nearby should the cold wind blow.  By the way, adding the word, blockchain, to a paper gold product might enhance its marketing appeal, but it changes nothing in terms of its usefulness to the investor.  The instrument is still paper gold and little more than a price bet.

Full article link

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Chartbook of the ‘In Gold We Trust’ Report 2018

Incrementum/Ronald Stoferle and Mark J. Valek/10-5-2018


• Loose monetary policy was a major ingredient of the unsustainable boom that resulted in the GFC.  The bust was met with even more radical interventions, such as various forms of quantitative easing programs, zero and negative interest rate policies as well as massive fiscal stimulus.

• Those drastic measures have clearly hampered the economy’s self – healing powers and have made the system dependent on continual injections of credit.

• But now, the first dark clouds are gathering on the (interest) horizon. Not only the Fed but also the ECB is slowly but surely leaning into the monetary turn (although with a substantial time lag)

USAGOLD note:  Stoferle and Valek’s new Chartbook is highly recommended.  The chart above seems particularly appropriate given the markets’ reaction to Fed tightening over the past two days.

Repost from 10-5-2018

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The crash is coming

Finanz und Wirtschaft/Christopher Geiger/10-4-2018

“Few investors have a deeper understanding of the tech sector than Fred Hickey. All the more concerning is his warning when it comes to the outlook for US equities. The renowned editor of the popular investment newsletter, The High-Tech Strategist, draws alarming parallels to the bursting of the dotcom bubble in the year 2000 and spots high risks in stock market darlings like Amazon  and Apple. . . Against this background, the outspoken contrarian sees bright opportunities in gold and in attractively priced mining stocks.”

USAGOLD note:  This is an interesting interview coming from someone who understands the odd modern-day contrarian dynamic/magnetics between high tech stocks and gold.


Image by Geek3 [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], from Wikimedia Commons


Repost from 10-9-2018

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Bigger risks to US Treasuries than China playing games

Financial Times/Joe Rennison/1-18-2019

“Much has been made of China’s management of its foreign currency reserves, especially when it comes to its vast holdings of US government debt. But the focus is not where it should be.”

USAGOLD note:  Rennison makes a point we have focused on here at USAGOLD, i.e.,  it is not so much China selling Treasuries that is the issue, but its withdrawal (along with Japan’s) from purchasing U.S. sovereign debt.  Whether or not their absence becomes the source of a more intractable problem with respect to interest rates depends upon how much of the growing U.S. debt offer domestic buyers can absorb.


Repost from 1-21-2019

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Gold gains ground on dovish Fed policy confirmation

Gold gained more ground in overnight and early U.S. trading on the Fed’s confirmation yesterday that it would put a hold on interest rate increases and its balance sheet asset sales. The metal is trading at $1325 and up almost $6 on the day. Silver is up 9¢ at $16.14. After a strong initial run-up the stock market seems to be taking some time to digest the Fed’s latest moves. The dollar, probably for similar reasons, is steady this morning. Commodities are showing modest strength.

Fund guru Jeffrey Gundlach, according to a Reuters report last night, reads the latest shift in Fed policy as “caving-in” to the stock market. CNBC’s Cramer says the Fed should not be seen as “caving-in” but saving Main Street America economically. For his part, the Fed chairman says that the Fed’s motivation is to do the right thing for the economy and the American people. “The situation calls for patience,” he said. “I think its the right thing. . . I feel strongly it is.” Motivations aside, the results for better or worse amounted to an “Hallelujah!” shouted from the rooftop of the financial markets. Stocks immediately rallied over 400 points. Commodities moved higher. Gold jumped $10 higher. The dollar dropped sharply.

Powell answers question about the “Powell put” (CNBC)

Quote of the Day
“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – William Strauss and Neil Howe, The Fourth Turning

Chart of the Day

Chart note: Here at USAGOLD, we suggested early on and repeatedly that the Fed was moving toward a dovish tilt. Yesterday the Fed moved from indications to confirmation. Gold reacted positively, as we might have guessed, quickly moving $10 higher out of the gate. Since the indications started rolling in late last summer, gold is up 12.8%.

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DMR–Gold gains ground on dovish Fed policy confirmation

DAILY MARKET REPORT

Gold gained more ground in overnight and early U.S. trading on the Fed’s confirmation yesterday that it would put a hold on interest rate increases and its balance sheet asset sales.  The metal is trading at $1325 and up almost $6 on the day.  Silver is up 9¢ at $16.14.  After a strong initial run-up the stock market seems to be taking some time to digest the Fed’s latest moves.  The dollar, probably for similar reasons, is steady this morning.  Commodities are showing modest strength.

Fund guru Jeffrey Gundlach, according to a Reuters report last night, reads the latest shift in Fed policy as “caving-in” to the stock market.  CNBC’s Cramer says the Fed should not be seen as “caving-in” but saving Main Street America economically.  For his part, the Fed chairman says that the Fed’s motivation is to do the right thing for the economy and the American people. “The situation calls for patience,” he said. “I think its the right thing. . . I feel strongly it is.”  Motivations aside, the results for better or worse amounted to an “Hallelujah!” shouted from the rooftop of the financial markets.  Stocks immediately rallied over 400 points. Commodities moved higher.  Gold jumped $10 higher. The dollar dropped sharply.

Powell answers  question about the “Powell put” (CNBC)

Quote of the Day
“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – William Strauss and Neil Howe, The Fourth Turning

Chart of the Day

Chart note: Here at USAGOLD, we suggested early on and repeatedly that the Fed was moving toward a dovish tilt.  Yesterday the Fed moved from indications to confirmation.  Gold reacted positively, as we might have guessed, quickly moving $10 higher out of the gate.  Since the indications started rolling in late last summer, gold is up 12.8%.

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Fed’s dovish pivot flattens remaining rate-hike expectations

Bloomberg/Christopher Condon/1-31-2019

“Not only did central bankers drop a reference to ‘further gradual increases’ in their statement on Wednesday, they implied the next move could just as likely be down as up. They also announced a more flexible approach to shrinking their bond portfolio, another acknowledgment of the recent financial market angst over tighter monetary policy.”

USAGOLD note:  Bloomberg offers a useful review of yesterday’s events.  For those who would like to take a step back and a little time to think about what might have just transpired, this article is a good place to start.

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LBMA Precious Metal Forecast Survey

The Alchemist/January 2019

“Divided opinion for gold prices with the price forecast to trade in a range $1,150 to $1,475, but the overall average is forecast to deliver a modest increase of 1.8% over the year compared to the average price in the first half of January. However, a trading spread of $325 (25% of the forecast average price) suggests that the gold price could be in for an interesting journey in 2019.”

USAGOLD note:
  We thought you might have an interest in what some of the top experts in the gold market – all members of the London Bullion Market Association – are thinking in terms of the prices on precious metals for 2019.
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London’s renminbi trading eclipses pound-euro

Financial Times/Evay Szalay/1-29-2019

“London’s push to become a major trading hub for the Chinese currency is paying off, with trading volumes for the renminbi eclipsing those for the pound against the euro for the first time last year, according to a survey from the Bank of England.”

USAGOLD note:  There is another aspect to this report worth considering.  China is making progress in its goal of making the yuan an important currency in competition with the dollar, the euro and other currencies.  The subhead to this report mentions that volumes in yuan/dollar are up 17%.

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Gold gets a safe-haven boost – Refinitiv’s GFMS report

MiningWeekly/Nadine James/1-30-2019

“Renewed interest from professional investors and a shift in the purchasing behaviour of emerging market central banks have compensated for a decline in the retail investment and jewellery segments. The report notes that activity in the professional investment sector gained traction in the final quarter of 2018, with a short covering rally in net managed money positions pushing up net short positions into net long positions for the first time since July.”

USAGOLD note:  We track most of the market dynamics covered in this article.  It’s importance lies in the fact that it brings together a lot of different aspects of the market in one article and that it comes from GFMS one of the gold market’s most important research firms.

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Venezuela has 20 tons of gold ready to ship. Address unknown

Bloomberg/Patricia Laya and Andrew Rosati/1-29-2019

“Venezuelan lawmaker Jose Guerra dropped a bombshell on Twitter Tuesday: The Russian Boeing 777 that had landed in Caracas the day before was there to spirit away 20 tons of gold from the vaults of the country’s central bank.”

USAGOLD note: The fact that the bullion might have been loaded onto a Russian Boeing 777 provides a rough clue as to where it might be headed.

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DMR–Gold drifts sideways ahead of Fed meeting, Powell press conference

DAILY MARKET REPORT

Gold is drifting sideways this morning as the markets await the results of today’s Fed meeting and chairman Powell’s press conference later this afternoon.  It is up $1 on the day at $1312.  Silver is up 7¢ at $15.91 and looking ready to knock on the door at the $16 level.

In its assessment this morning of what we might expect from the Fed and Mr. Powell, Financial Times predicted a “steady course” and the possibility that the word “patience” might show up in the final public statement. On the question of the balance sheet – the issue on the minds of many – it cites Yale professor Bill English as saying “they’re feeling their way and seeing how the reserve market reacts.” Confirmation of a change of direction on its balance sheet approach could create major reverberations in the financial markets including gold.

Above all, the Fed will make every effort to present the appearance of quiet deliberation and keep the market guessing by leaving its options open.  Whether or not it is successful in that endeavor is what adds interest to the proceedings and figures largely into prospects for gold and other assets in the days and weeks ahead.

We will report back later today if there are any surprises. . .

Quote of the Day
“A lot of the bank issues in the United States and around the world have been solved. But migrating the problem to the sovereign balance sheets. So the banks look pretty good, but the Fed has $4 trillion of debt on its balance sheet. And it’s even more, we are not in a European audience. In Europe they would really know what they meant because all the European banking system is fixed but Europeans are all also buying up all the debt. The budget deficits haven’t contracted, they’ve widened. The banks buy the debt, then walk over to the European Central bank, finance it. . . You wonder is the next crisis going to be a sovereign crisis. And if it is, it will just be a continuation. People will look back and say ‘what we really did, we didn’t fix the outcome of the financial crisis. We left that open and as a result, its really been a thirty-year workout.’” – Lloyd Blankfein, Goldman Sachs

Chart of the Day

Chart note:  “The  Economic Policy Uncertainty Index,” says the St. Louis Federal Reserve, “calculates the proportion of newspaper stories that discuss uncertainty, changes to tax codes, and disagreement among forecasters.”  As you can see, a sustained rise in the index corresponds with a rising gold price – some would say leads it.  At present, it looks to be in a rising trend that began in 2016 in sync with gold’s rising price over the same period.  On Friday, gold pushed through the $1300 barrier for the first time since April of last year amidst a flurry of concern on a range of economic and geopolitical issues.

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Gold drifts sideways ahead of Fed meeting, Powell press conference

Gold is drifting sideways this morning as the markets await the results of today’s Fed meeting and chairman Powell’s press conference later this afternoon.  It is up $1 on the day at $1312.  Silver is up 7¢ at $15.91 and looking ready to knock on the door at the $16 level.

In its assessment this morning of what we might expect from the Fed and Mr. Powell, Financial Times predicted a “steady course” and the possibility that the word “patience” might show up in the final public statement. On the question of the balance sheet – the issue on the minds of many – it cites Yale professor Bill English as saying “they’re feeling their way and seeing how the reserve market reacts.” Confirmation of a change of direction on its balance sheet approach could create major reverberations in the financial markets including gold.

Above all, the Fed will make every effort to present the appearance of quiet deliberation and keep the market guessing by leaving its options open.  Whether or not it is successful in that endeavor is what adds interest to the proceedings and figures largely into prospects for gold and other assets in the days and weeks ahead.

We will report back later today if there are any surprises. . .

 

Quote of the Day
“A lot of the bank issues in the United States and around the world have been solved. But migrating the problem to the sovereign balance sheets. So the banks look pretty good, but the Fed has $4 trillion of debt on its balance sheet. And it’s even more, we are not in a European audience. In Europe they would really know what they meant because all the European banking system is fixed but Europeans are all also buying up all the debt. The budget deficits haven’t contracted, they’ve widened. The banks buy the debt, then walk over to the European Central bank, finance it. . . You wonder is the next crisis going to be a sovereign crisis. And if it is, it will just be a continuation. People will look back and say ‘what we really did, we didn’t fix the outcome of the financial crisis. We left that open and as a result, its really been a thirty-year workout.’” – Lloyd Blankfein, Goldman Sachs

Chart of the Day

Chart note:  “The  Economic Policy Uncertainty Index,” says the St. Louis Federal Reserve, “calculates the proportion of newspaper stories that discuss uncertainty, changes to tax codes, and disagreement among forecasters.”  As you can see, a sustained rise in the index corresponds with a rising gold price – some would say leads it.  At present, it looks to be in a rising trend that began in 2016 in sync with gold’s rising price over the same period.  On Friday, gold pushed through the $1300 barrier for the first time since April of last year amidst a flurry of concern on a range of economic and geopolitical issues.

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Fed balance-sheet fracas highlights confusion over market impact

Bloomberg/Alex Harris and Emily Barrett/1-28-2019

“There’s been no shortage of industry veterans sounding the balance-sheet alarm in recent weeks. DoubleLine Capital Chief Executive Officer Jeffrey Gundlach says the unwind, interest-rate policy and guidance on where the two are headed have resulted in the equivalent of 15 implied tightenings. Billionaire Stanley Druckenmiller has called it a ‘double-barreled blitz’ that could lead to a major policy error. And Guggenheim Partners Chief Investment Officer Scott Minerd has expressed concerns that liquidity constraints could give way to systemic risk.”

USAGOLD note:  One would have to say that the opinion of the three gentlemen quoted above represents the heart and soul of Wall Street’s best and brightest.  We’ll know more about how the Fed sees it by tomorrow afternoon.

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May rolls the dice with move to reopen Brexit deal

Financial Times/George Parker, Laura Hughes and Alex Barber/1-29-2019

“Theresa May’s allies had no doubt about the significance of the UK prime minister’s move. ‘It’s the last throw of the dice,’ admitted one, as Mrs May prepared for a climactic fight in Brussels just two months before Britain is scheduled to leave the EU. ‘But this is it: it’s 5am in the casino.’”

USAGOLD note:  The subheadline to this FT article proclaims May’s siding with the Euroskeptics.

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Investment Update – Cryptocurrencies are not a safe-haven

World Gold Council/1-29-2019

“In Q4 2018, as global stock markets experienced their worst quarter since 2009, cryptocurrencies had a prime opportunity to demonstrate qualities associated with safe havens like gold. However, cryptocurrencies, such as bitcoin, behaved like risky assets and fell while gold rallied.”


Chart courtesy of the World Gold Council

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Why central bank buying has the gold market guessing

Bloomberg Businessweek/Rupert Rowling

“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

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Separating truth from fiction in China’s golden game of Poker

Bullion Star/Ronan Manly/1-12-2019

“We will have to wait until the next SAFE reserve asset report in early February to see whether the PBoC decides to announce any gold purchases for January. If so, it could mark the beginning of a trend of regular monthly reporting by the Chinese state. If not, then the 10 tonnes gold purchase in December 2018 will go down as a strange anomaly, perhaps as a warning shot to economic adversaries such as the US that it can at any time announce gold reserve updates which could impact foreign exchange markets.”

USAGOLD note: This detailed analysis from gold market researcher Ronan Manly dissects the role the Chinese government and central bank are playing in the gold market. He reiterates the standard argument among top-drawer gold market analysts that what we are getting from Chinese sources might not be the full story on China’s gold reserves.  It includes some interesting research as to what gold market professionals think might be the real levels of Chinese official sector gold ownership.

Chart courtesy of GoldChartsRUs/Nick Laird


Repost from 1-15-2019

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DMR–Gold jumps in London trading on Brexit concerns

DAILY MARKET REPORT

Gold made its latest dash to the upside overnight at the London AM Fix – a solid indication that it had to do with Brexit.  It is trading at $1309 – up $5 on the day – well above the previously daunting $1300 threshold.  Silver has followed suit – up 10¢ on the day at $15.87.

On occasion, we have pondered what a hard Brexit might mean for the gold market with London and its banks being the global center of the gold physical and trading businesses. Whether or not today’s move to the upside is related directly to that, or general concerns about the consequences of Britain departing the EU without an agreement, is something of an open question.

A Bloomberg headline sums things up: May rips up divorce plan to keep party united.  The United Kingdom for all the months – make that years – of wrangling seems back at square one. The European Union, for its part, is a long way from budging on its position that the agreement on the table is the only agreement possible.  Bloomberg informs us that there will be a five and half hour debate in Parliament this afternoon with Theresa May on the hot seat.

And we point out that gold moved solidly over the $1300 mark on the day the Fed will convene its deliberations on interest rates, the balance sheet drawdown, etc.

Quote of the Day
Venezuela’s economy has collapsed. This is the result of years of socialism, incompetence, and corruption, among other things. An important element that mirrors the economy’s collapse is Venezuela’s currency, the bolivar. It is not trustworthy. Venezuela’s exchange rate regime provides no discipline. It only produces instability, poverty, and the world’s highest inflation rate for 2018.  Indeed, Venezuela’s annual inflation rate at the end of 2018 was 80,000%.” – Steve Hanke, Johns Hopkins University, economic advisor to former Venezuelan president, Rafael Caldera (1995-1996)

Chart of the Day


Chart courtesy of TradingEconomics.com

Chart note:  When a combination of currency debasement and inflation strikes an economy, the effects can be sudden and severe, as indicated in the two charts shown above. “Consumer prices in Venezuela,” reports TradingEconomics.com, “jumped 1,300,000 percent year-on-year in November of 2018, up from a 833,997 climb in October, according to estimates from Venezuela’s opposition-led congress. Inflation rate in Venezuela averaged 3268.55 percent from 1973 until 2018, reaching an all time high of 833997 percent in October of 2018 and a record low of 3.22 percent in February of 1973. The USDVEB traded at 248,520.9000 on Wednesday January 23. Historically, the Venezuelan Bolivar reached an all time high of 248520.90 in August of 2018 and a record low of 0.05 in January of 1989.” It does not take a great deal of imagination to contemplate what the effects might have been on the price of gold in Bolivars.

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Gold jumps in London trading on Brexit concerns

DAILY MARKET REPORT

Gold made its latest dash to the upside overnight at the London AM Fix – a solid indication that it had to do with Brexit. It is trading at $1309 – up $5 on the day – well above the previously daunting $1300 threshold. Silver has followed suit – up 10¢ on the day at $15.87.

On occasion, we have pondered what a hard Brexit might mean for the gold market with London and its banks being the global center of the gold physical and trading businesses. Whether or not today’s move to the upside is related directly to that, or general concerns about the consequences of Britain departing the EU without an agreement, is something of an open question.

A Bloomberg headline sums things up: May rips up divorce plan to keep party united. The United Kingdom for all the months – make that years – of wrangling seems back at square one. The European Union, for its part, is a long way from budging on its position that the agreement on the table is the only agreement possible. Bloomberg informs us that there will be a five and half hour debate in Parliament this afternoon with Theresa May on the hot seat.

And we point that gold moved solidly over the $1300 mark on the day the Fed will convene its deliberations on interest rates, the balance sheet drawdown, etc.

Quote of the Day
Venezuela’s economy has collapsed. This is the result of years of socialism, incompetence, and corruption, among other things. An important element that mirrors the economy’s collapse is Venezuela’s currency, the bolivar. It is not trustworthy. Venezuela’s exchange rate regime provides no discipline. It only produces instability, poverty, and the world’s highest inflation rate for 2018. Indeed, Venezuela’s annual inflation rate at the end of 2018 was 80,000%.” – Steve Hanke, Johns Hopkins University, economic advisor to former Venezuelan president, Rafael Caldera (1995-1996)

Chart of the Day


Chart courtesy of TradingEconomics.com

Chart note: When a combination of currency debasement and inflation strikes an economy, the effects can be sudden and severe, as indicated in the two charts shown above. “Consumer prices in Venezuela,” reports TradingEconomics.com, “jumped 1,300,000 percent year-on-year in November of 2018, up from a 833,997 climb in October, according to estimates from Venezuela’s opposition-led congress. Inflation rate in Venezuela averaged 3268.55 percent from 1973 until 2018, reaching an all time high of 833997 percent in October of 2018 and a record low of 3.22 percent in February of 1973. The USDVEB traded at 248,520.9000 on Wednesday January 23. Historically, the Venezuelan Bolivar reached an all time high of 248520.90 in August of 2018 and a record low of 0.05 in January of 1989.” It does not take a great deal of imagination to contemplate what the effects might have been on the price of gold in Bolivars.

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Downbeat Davos is still short on introspection

DAVOS WATCH

Reuters/Peter Thal Larsen/1-25-2019

“The gloom contrasted with the misplaced optimism of the previous year. One important factor remained unchanged, though: the supreme confidence of World Economic Forum delegates in their ability to predict what’s next.”

USAGOLD note:  The final word on a Davos conference that might be remembered as one of the gloomiest in its long history.

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Ten factors to look for in gold in 2019

Alasdair Macleod/ZeroHedge/1-28-2019

“Besides the decline in global trade being a clear signal that the global economy is in trouble, the budget deficit in the US will rise and therefore the trade deficit will tend to rise as well. If not, an increase in the savings rate must occur, which I think we can rule out, or there has to be a contraction in bank credit. In other words, contracting international trade can be expected to propel the US and other domestic economies into a slump. This is bound to provoke the Fed into financing the US government deficit through yet more QE.”

USAGOLD note: Macleod offers ten interesting insights in this bullet-form overview at the link.

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It’s time to ‘dismount’ from this stock-market rodeo, says Morgan Stanley’s Wilson

MarketWatch/Sue Chang/1-28-2019

“Timing is everything and Morgan Stanley’s chief equity strategist Mike Wilson is telling investors that they need to get out of stocks right now even if the market still has some upside potential. Employing a rodeo metaphor, Wilson on Monday urged his clients to ‘dismount’ as the market’s rally since late 2018 is starting to look precarious.”

USAGOLD note:  I was surprised at the bold piece of advice from Morgan Stanley’s chief equity strategist.  He worries that the economy “may not fully recover from the partial government shutdown”  Larry Kudlow, White House economic advisor, took the opposite tack telling The Hill that “the shutdown will not do lasting damage.”

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Physical demand for silver forecast to top supply in 2019

Bloomberg/Marvin G. Perez/1-28-2019

“About 26,000 tons of silver is expected to be produced this year, according to estimates by Robin Bhar, a London-based analyst at Societe Generale SA. That would be the least since 2013, and means global physical demand will top supply for seventh straight year.”

USAGOLD note:  A positive assessment to start the year from Societe Generale based on the fundamentals.

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Yet another MAJOR reason to buy gold

SovereignMan/Simon Black/1-14-2019

“These consolidations are already happening. Literally just today, Telfer’s $8.5 billion Goldcorp was acquired by Newmont Mining for $10 billion. This isn’t the first deal like this: back in September, Barrick Gold bought Randgold Resources in a $6 billion deal. This is exactly what you’d expect to see in an era where gold miners are acquiring each other and consolidating their production. And all of this should be quite favorable for gold prices over the long-term.”

USAGOLD note: Simon Black importantly puts recent gold mining mergers among major producers into perspective for coin and bullion investors, and offers some interesting thinking on what it might mean for the gold price in the future.


Repost from 1-16-2019

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Sam Zell says gold ‘is a good hedge’

Bloomberg/Daybreak-video interview/1-17-2019

“Sam Zell, the founder of Equity Group Investments, says he bought gold for the first time in his life because ‘it’s a good hedge.'”

USAGOLD note:  Billionaire Sam Zell is not the first property mogul to become a gold owner, nor will he be the last.  He adds his name to a long list of renowned money men who have made their interest in gold public over the past several months.


Repost from 1-19-2019

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DMR–Gold sidetracked in early trading by upcoming Fed meeting

DAILY MARKET REPORT

Gold trundled to a sidetrack this morning in anticipation of this week’s Fed meeting scheduled to begin tomorrow and end with a statement and press conference on Wednesday.  The metal is trading as this is posted right at $1300 – down $3.30 on the day.  Silver is down 8¢ at $15.66. Gold historically spends Fed Week in either a wait-and-see mode or moving to the downside.  On rare occasion though, as was the case in December, it pushes higher.  Taking Friday’s Fed-based move to the upside into consideration, it will be interesting to see how the market reacts this time around.  The dollar index seems to be similarly sidetracked this morning despite fairly strong moves higher overnight in both the yuan and yen. Commodities and stocks are down sharply.  Such as it is, we will sign off for now and report back if anything of interest develops later this afternoon.

Quote of the Day
“So why gold? People buy gold to protect their savings not because it is rare, yellow or shiny, but because of what it isn’t. Gold isn’t debt, equity or any other financial promise. It doesn’t rely on anyone else’s survival to exist. It can’t be destroyed any more than it can be created at will. Call it the ‘gut level case for gold’ – an urgent, all-consuming need to buy a dumb lump of metal which does so little, it doesn’t even rust, but which people in all ages and all cultures have used to store value.” – Adrian Ash, Bullion Vault

Chart of the Day

Chart note:  The chart on gold and silver since September of last year is an impressive one. Gold is up 9% and silver is up 12% as of Friday’s close.  

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

Gold sidetracked in early trading by upcoming Fed meeting

DAILY MARKET REPORT

Gold trundled to a sidetrack this morning in anticipation of this week’s Fed meeting scheduled to begin tomorrow and end with a statement and press conference on Wednesday. The metal is trading as this is posted right at $1300 – down $3.30 on the day. Silver is down 8¢ at $15.66. Gold historically spends Fed Week in either a wait-and-see mode or moving to the downside. On rare occasion though, as was the case in December, it pushes higher. Taking Friday’s Fed-based move to the upside into consideration, it will be interesting to see how the market reacts this time around. The dollar index seems to be similarly sidetracked this morning despite fairly strong moves higher overnight in both the yuan and yen. Commodities and stocks are down sharply. Such as it is, we will sign off for now and report back if anything of interest develops later this afternoon.

Quote of the Day
“So why gold? People buy gold to protect their savings not because it is rare, yellow or shiny, but because of what it isn’t. Gold isn’t debt, equity or any other financial promise. It doesn’t rely on anyone else’s survival to exist. It can’t be destroyed any more than it can be created at will. Call it the ‘gut level case for gold’ – an urgent, all-consuming need to buy a dumb lump of metal which does so little, it doesn’t even rust, but which people in all ages and all cultures have used to store value.” – Adrian Ash, Bullion Vault

Chart of the Day

Chart note: The chart on gold and silver since September of last year is an impressive one. Gold is up 9% and silver is up 12% as of Friday’s close.

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Posted in dailyquotes |

Bond traders face plenty of risk as Powell ushers in a new era

Briefing on this week’s Fed meeting

Bloomberg/Liz McCormick/1-25-2019

“Officials are expected to keep interest rates unchanged following nine hikes since 2015. But investors see scope for the Fed’s statement to tilt dovish, or for Powell to signal as much in his comments, a shift that could help drive yields lower. Also in focus — any hint that the central bank is closer to ending its balance-sheet runoff, which, combined with the deal to reopen the government, could bolster risk sentiment at the expense of Treasuries.”

USAGOLD note:  One takeaway from this overview is that chairman Powell will usher in a “new era” of press conferences after every Fed meeting. Even if the subject of the balance-sheet runoff is avoided in the post-meeting Fed statement, it is likely to come up at the press conference.

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Posted in Today's top gold news and opinion |