Author Archives: Daily Market Report

DMR–Gold attempts to regain footing amidst mixed signals

DAILY MARKET REPORT

Gold is attempting to regain its footing this morning after yesterday’s options-related sell-off.  It is up $2.50 on the day at $1205.50.  Silver is down 3¢ at $14.74.  Emerging country debt and currency problems are back on the financial pages this morning. Turkey’s lira is down 3% and Argentina’s peso and India’s rupee hit all-time lows overnight. The Fed will be looking to strike a balance between two extremes:  A warming domestic U.S. economy versus a cooling, even threatening, global economy fueled by a too-strong dollar.

Quote of the Day
“At the 1955 stock-market hearings, [economist John Kenneth] Galbraith was followed at the witness table by the aging speculator and ‘adviser to presidents’ Bernard M. Baruch. The committee wanted to know what the Wall Street legend thought of the learned economist. ‘I know nothing about him to his detriment,’ Baruch replied. ‘I think economists as a rule—and it is not personal to him—take for granted they know a lot of things. If they really knew so much, they would have all of the money, and we would have none.'” – James Grant, Wall Street Journal editorial (10-1-2010)

Chart of the Day

Chart courtesy of Advisor Perspectives

Chart note: There are a couple of things unsettling about this chart. First is the sheer amount of investor margin debt present in the current stock market – over $650 billion. Second is the correlation between the growth of that debt and ascent of the S&P 500. With that amount of leverage in the stock market and the influence it has on price levels, if and when the margin calls arrive, the tumble could be fast and extreme. FINRA (Financial Industry Regulatory Authority) warns that “many investors may underestimate the risks of trading on margin and misunderstand the operation of, and reason for, margin calls.” Shades of 1929.

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Afternoon Update

(USAGOLD, 8-28-2018) – In the absence of any market altering news to speak of, it was surprising to see gold drop about $8 in the last two hours of trading, and silver 15¢.  Looking around for a good reason to explain the sell-off, our best guess is options-related selling. Today is options expiration day on the September contract for both gold and silver. Gold finished at the $1201 mark, down $10.50 on the day. Silver finished at $14.70, down19¢ on the day.

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Posted in dailyquotes |

Afternoon Update

(USAGOLD, 8-28-2018) – In the absence of any market altering news to speak of, it was surprising to see gold drop about $8 in the last two hours of trading, and silver 15¢.  Looking around for a good reason to explain the sell-off, our best guess is options-related selling. Today is options expiration day on the September contract for both gold and silver. Gold finished at the $1201 mark, down $10.50 on the day. Silver finished at $14.70, down19¢ on the day.

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Posted in Today's top gold news and opinion |

Gold down on quiet news day thus far

Gold is down $3 at $1208 – with nothing of earth-shaking importance having developed overnight or early in the New York market session. Aiding gold, China’s yuan is showing some strength today, as is the yen, while the rest of the currencies seem to be carried in their wake. Silver is down 5¢ thus far at $14.85.

Quote of the Day
“Speculators in gold price futures are short 670 tonnes – the biggest bearish position in 25 years. . .ANZ analysts Daniel Hynes and Soni Kumari say in the past, ‘such extreme levels of short positions have led to a rally in prices: 1999, short positions rose fivefold to hit a then record level of 80,000 contracts. Not long after, gold prices rallied 16% from USD250/oz to USD290/oz over the course of two months. Short positions spiked again in July 2005 and January 2016, with gold prices rallying 12% and 14% respectively over the subsequent three months. In both these cases, the net long position was extremely close to being negative. This raises the spectre of investors closing out their record level of short positions, and thus starting a short covering rally.” – Frik Els, Mining.com

Chart of the Day

Chart note: While commodities have held their own during this stage of the trade wars, gold has declined dramatically by comparison – a break in the long-term pattern of the two moving in the same direction. Some believe gold could play catch-up as we move into the last third of the year. Much of the downside for gold has been the result of the short position built to record levels on the commodities exchange – a position that will need to be covered in order for the speculators to claim their gains. In the past, as Frik Els points out in our Quote of the Day, covering those short positions has led to price rallies in 1999, 2005 and 2016. We might add there was a less pronounced example of short-covering in 2017 as well.

 

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DMR–Gold down on quiet news day thus far

DAILY MARKET REPORT

Gold is down $3 at $1208 – with nothing of earth-shaking importance having developed overnight or early in the New York market session. Aiding gold, China’s yuan is showing some strength today, as is the yen, while the rest of the currencies seem to be carried in their wake. Silver is down 5¢ thus far at $14.85.

Quote of the Day
“Speculators in gold price futures are short 670 tonnes – the biggest bearish position in 25 years. . .ANZ analysts Daniel Hynes and Soni Kumari say in the past, ‘such extreme levels of short positions have led to a rally in prices: 1999, short positions rose fivefold to hit a then record level of 80,000 contracts. Not long after, gold prices rallied 16% from USD250/oz to USD290/oz over the course of two months. Short positions spiked again in July 2005 and January 2016, with gold prices rallying 12% and 14% respectively over the subsequent three months. In both these cases, the net long position was extremely close to being negative. This raises the spectre of investors closing out their record level of short positions, and thus starting a short covering rally.” – Frik Els, Mining.com

Chart of the Day

Chart note: While commodities have held their own during this stage of the trade wars, gold has declined dramatically by comparison – a break in the long-term pattern of the two moving in the same direction. Some believe gold could play catch-up as we move into the last third of the year. Much of the downside for gold has been the result of the short position built to record levels on the commodities exchange – a position that will need to be covered in order for the speculators to claim their gains. In the past, as Frik Els points out in our Quote of the Day, covering those short positions has led to price rallies in 1999, 2005 and 2016. We might add there was a less pronounced example of short-covering in 2017 as well.

 

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Posted in Today's top gold news and opinion |

Gold up $6 in continuation of trend begun Friday

Gold pushed another $6 higher at $1212 in a continuation of the upward trend begun on Friday. Overseas trading was quiet. Silver is up 10¢ at $14.89. Gold is up $27 since last Thursday’s close. As we reported last week, the market is being driven by a combination of three major developments – dovish remarks from the Fed chairman in a speech delivered on Friday, China’s moves to strengthen the yuan, and the perceived potential for short covering from speculators squaring the record short position at the COMEX (if not actual covering). The dollar is down sharply in early trading.

Quote of the Day
“President Trump’s actions over trade, which appear to have some short-term successes, are driving countries away from her sphere of influence. Ultimately this will prove counterproductive. Speculators buying into Trump’s short-termism and the Fed’s normalization policies are for the moment driving the dollar higher, without realizing that foreigners, far from suffering from a shortage of dollars, already own all the excess dollar liquidity created since the Lehman crisis. This seems certain to lead to the dollar’s downfall. Therefore, the dollar is rising only on short-term considerations, driven by nothing more substantial than speculative flows.

Once these abate, the longer-term prospects for the dollar will reassert themselves, including the escalating budget and trade deficits, record levels of foreign ownership of the dollar, and rising prices fueled by a combination of earlier monetary expansion and the extra taxes of trade tariffs. And if that’s not enough, the erosion of its hegemony coupled with China’s future demands for infrastructure capital seem bound to lead to a fundamental reallocation of capital to the detriment of the dollar. No wonder China and Russia decided to corner the market for physical gold.” – Alasdair Macleod, Mises Institute

Chart[s] of the Day

Charts note: The last time we featured these two charts, it was to illustrate the relationship between gold and the yuan as they moved in tandem to the downside. Late last week we caught a glimpse of the other side of the story – the upside. In Friday’s DMR we made note of the possibility that China might have an interest in demonstrating its desire to keep the yuan from plummeting to a disastrously low level. Though we emphasized trade negotiations with the United States as one incentive, there is another driver to Chinese policy that may be even more important over the longer run and the one with staying power. China also has an interest in controlling, even stopping, capital flight. China’s oft-state goal, we should remember, is to position the yuan as a competitor to the dollar for global reserve currency status. As a result the aspirations of the yuan might also become support for the price of gold.

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DMR-Gold up $6 in continuation of trend begun on Friday

Gold pushed another $6 higher at $1212 in a continuation of the upward trend begun on Friday.  Overseas trading was quiet.  Silver is up 10¢ at $14.89. Gold is up $27 since last Thursday’s close.  As we reported last week, the market is being driven by a combination of three major developments – dovish remarks from the Fed chairman in a speech delivered on Friday, China’s moves to strengthen the yuan, and the perceived potential for short covering from speculators squaring the record short position at the COMEX (if not actual covering).  The dollar is down sharply in early trading.

Quote of the Day
“President Trump’s actions over trade, which appear to have some short-term successes, are driving countries away from her sphere of influence. Ultimately this will prove counterproductive. Speculators buying into Trump’s short-termism and the Fed’s normalization policies are for the moment driving the dollar higher, without realizing that foreigners, far from suffering from a shortage of dollars, already own all the excess dollar liquidity created since the Lehman crisis. This seems certain to lead to the dollar’s downfall. Therefore, the dollar is rising only on short-term considerations, driven by nothing more substantial than speculative flows.

Once these abate, the longer-term prospects for the dollar will reassert themselves, including the escalating budget and trade deficits, record levels of foreign ownership of the dollar, and rising prices fueled by a combination of earlier monetary expansion and the extra taxes of trade tariffs. And if that’s not enough, the erosion of its hegemony coupled with China’s future demands for infrastructure capital seem bound to lead to a fundamental reallocation of capital to the detriment of the dollar. No wonder China and Russia decided to corner the market for physical gold.” – Alasdair Macleod, Mises Institute

Chart[s] of the Day

Charts note:  The last time we featured these two charts, it was to illustrate the relationship between gold and the yuan as they moved in tandem to the downside.  Late last week we caught a glimpse of the other side of the story – the upside. In Friday’s DMR we made note of the possibility that China might have an interest in demonstrating its desire to keep the yuan from plummeting to a disastrously low level.  Though we emphasized trade negotiations with the United States as one incentive, there is another driver to  Chinese policy that may be even more important over the longer run and the one with staying power. China also has an interest in controlling, even stopping, capital flight.  China’s oft-state goal, we should remember, is to position the yuan as a competitor to the dollar for global reserve currency status.  As a result the aspirations of the yuan might also become support for the price of gold.

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

DMR–Gold higher third day in a row, market setting up for ‘dramatic short covering rally’

Gold is down $3 at $1208 – with nothing of earth-shaking importance having developed overnight or early in the New York market session.  Aiding gold, China’s yuan is showing some strength today, as is the yen, while the rest of the currencies seem to be carried in their wake.  Silver is down 5¢ thus far at $14.85.  Commenting on the record short positions in the gold and silver commodities markets, Tocqueville’s John Hathaway concludes that “The current futures market structure appears to be a set up for a dramatic short covering rally that will end up in losses for speculative shorts.”

Quote of the Day
“Speculators in gold price futures are short 670 tonnes – the biggest bearish position in 25 years. . .ANZ analysts Daniel Hynes and Soni Kumari say in the past, ‘such extreme levels of short positions have led to a rally in prices: 1999, short positions rose fivefold to hit a then record level of 80,000 contracts. Not long after, gold prices rallied 16% from USD250/oz to USD290/oz over the course of two months. Short positions spiked again in July 2005 and January 2016, with gold prices rallying 12% and 14% respectively over the subsequent three months. In both these cases, the net long position was extremely close to being negative. This raises the spectre of investors closing out their record level of short positions, and thus starting a short covering rally.” – Frik Els, Mining.com

Chart of the Day

Chart note:  While commodities have held their own during this stage of the trade wars, gold has declined dramatically by comparison – a break in the long-term pattern of the two moving in the same direction. Some believe gold could play catch-up as we move into the last third of the year. Much of the downside for gold has been the result of the short position built to record levels on the commodities exchange – a position that will need to be covered in order for the speculators to claim their gains. In the past, as Frik Els points out in our Quote of the Day, covering those short positions has led to price rallies in 1999, 2005 and 2016. We might add there was a less pronounced example of short-covering in 2017 as well.

 

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Gold up sharply on dovish Fed and dollar rumblings, possible short covering

Gold moved sharply to the upside this morning in response to dovish rumblings in financial media on the Fed chairman’s speech later in the day, a higher yuan and speculation about intervention to weaken the dollar. The metal is up $12 on the day thus far at $1197 and pushing toward the $1200 mark. Silver is up 22¢ at $14.76. Also, not to be ruled out, this morning’s rally is reminiscent of last Friday’s – a price surge we thought might be related to short-covering.

The commodities complex as a whole is pushing higher led by oil, gasoline and copper.  Given the generally negative breakdown in China-U.S. talks, what the Wall Street Journal described as ending with a “thud”, the commodities rally begs explanation. Meanwhile, the notion that the White House might intervene in currency markets to weaken the dollar gained additional credence via a major Bloomberg article this morning. “A deliberate move to weaken the dollar isn’t far fetched anymore,” said the news service.

We will update later in the day if any fresh news becomes available.

Added note:  The Wall Street Journal this morning reported a senior official as stating that “To get a positive result from these engagements, the Chinese must address the issues raised by the U.S.”  Perhaps, downward manipulation of the yuan was one of those issues.  Are the gold and currency markets reading the pullback in the yuan overnight as an attempt by China to send a message?  Could be.

Quote of the Day
“It was significant that we didn’t see any bears at either venue despite doing a 7.30am, 13 mile valley floor hike! I’m sure the absence of fellow bears was a significant countertrend sign. I learned something else on my trip worth sharing. We took the Yosemite Tram tour of the valley floor and the ranger gave a very interesting talk about fire. Until 1970 Yosemite Parks was extinguishing regular small-scale fires to prevent property damage. The resultant rise in dense small tree growth meant that although fires were less frequent, they quickly got out of control. Since 1970 they have allowed more fires to burn, resulting in less damage. . . It is therefore reasonable to argue that the US has already faced a ‘normal’ tightening cycle and any additional rate hikes are taking us into territory not seen in recent times. This already may be enough for the Fed to have broken something.” – Albert Edwards, Society Generale

Chart note: This chart shows the gains or losses in gold from the same month a year earlier. Since the Fed began raising interest rates in early 2016, gold has gone higher in 22 out of the past 30 months. That means that you could have purchased gold in any one of those months a year earlier and showed a gain 12 months later, and sometimes that gain was significant – as much as 10% to 22%!

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Posted in dailyquotes |

DMR–Gold up sharply on dovish Fed rumblings and dollar intervention speculation, possible short covering

Gold moved sharply to the upside this morning in response to dovish rumblings in financial media on the Fed chairman’s speech later in the day, a higher yuan and speculation about intervention to weaken the dollar.  The metal is up $12 on the day thus far at $1197 and pushing toward the $1200 mark.  Silver is up 22¢ at $14.76.  Also, not to be ruled out, this morning’s rally is reminiscent of last Friday’s – a price surge we thought might be related to short-covering.

The commodities complex as a whole is pushing higher led by oil, gasoline and copper.  Given the generally negative breakdown in China-U.S. talks, what the Wall Street Journal described as ending with a “thud”, the commodities rally begs explanation. Meanwhile, the notion that the White House might intervene in currency markets to weaken the dollar gained additional credence via a major Bloomberg article this morning. “A deliberate move to weaken the dollar isn’t far fetched anymore,” said the news service.

Added note:  The Wall Street Journal this morning reported a senior official as stating that “To get a positive result from these engagements, the Chinese must address the issues raised by the U.S.”  Perhaps, downward manipulation of the yuan was one of those issues.  Are the gold and currency markets reading the pullback in the yuan overnight as an attempt by China to send a message?  Could be.

We will update later in the day if any fresh news becomes available.

Quote of the Day
“It was significant that we didn’t see any bears at either venue despite doing a 7.30am, 13 mile valley floor hike! I’m sure the absence of fellow bears was a significant countertrend sign. I learned something else on my trip worth sharing. We took the Yosemite Tram tour of the valley floor and the ranger gave a very interesting talk about fire. Until 1970 Yosemite Parks was extinguishing regular small-scale fires to prevent property damage. The resultant rise in dense small tree growth meant that although fires were less frequent, they quickly got out of control. Since 1970 they have allowed more fires to burn, resulting in less damage. . . It is therefore reasonable to argue that the US has already faced a ‘normal’ tightening cycle and any additional rate hikes are taking us into territory not seen in recent times. This already may be enough for the Fed to have broken something.” – Albert Edwards, Society Generale

Chart note: This chart shows the gains or losses in gold from the same month a year earlier. Since the Fed began raising interest rates in early 2016, gold has gone higher in 22 out of the past 30 months. That means that you could have purchased gold in any one of those months a year earlier and showed a gain 12 months later, and sometimes that gain was significant – as much as 10% to 22%! 

 

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

Gold backs off from gains earlier in the week, generally quiet day so far

Gold backed off a bit today from gains earlier in the week responding to a combination of interest rate concerns and renewed trade war tensions. The metal dipped as low as $1187 during Asian trading hours then recovered to trade in the $1192 range as New York opened – down $3 on the day. Silver is down 9¢ on the day at $14.67. Without much to report, we will sign off for now and update at the live newsletter page if anything interesting develops during the course of the day.

Quote[s] of the Day
Central bankers are coy about gold’s importance as a monetary metal. Former Fed Chair Benjamin Bernanke, at one of our hearings, claimed flatly that gold was not money. When I pressed Bernanke on why, then, do central banks hold gold, he declared that after a long pause that it was merely ‘tradition.’ He had no interest in my suggestion that the gold could be sold off to the American people if it’s not money. The point is that due to today’s impending crisis, many governments are now accumulating more gold—while others are holding onto what they have with the expectation it will once again be used in the monetary system.” – Ron Paul, former Congressman and presidential candidate [Emphasis added]

“Students of monetary history should recall that global growth shrank in the wake of the Smoot-Hawley Tariff Act of 1930, and the US was forced to devalue the dollar against gold in January 1934 with the result that the gold price rose by 70% (from $20.67 to $35.00).” – Martin Murenbeeld, Gold Monitor newsletter

Chart of the Day

Chart note: This chart demonstrates gold’s strong performance as a portfolio holding over a long period of time. It depicts the average annual price of gold since 1970. It dispels the notion that gold is somehow volatile or unpredictable and as a result unreliable as a long-term portfolio safe haven. To the contrary, it shows gold living up to its reputation as precisely the opposite – stable in the face of rapidly changing economic circumstances, predictable in that it reacts directly to those circumstances and reliable in that has performed as advertised over an extended period of time – the extent of the fiat money era that began in 1971.

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DMR–Gold backs off from gains earlier in the week, generally quiet day so far

DAILY MARKET REPORT

Gold backed off a bit today from gains earlier in the week responding to a combination of interest rate concerns and renewed trade war tensions.  The metal dipped as low as $1187 during Asian trading hours then recovered to trade in the $1192 range as New York opened – down $3 on the day.  Silver is down 9¢ on the day at $14.67.  Without much to report, we will sign off for now and update at the live newsletter page if anything interesting develops during the course of the day.

Quote[s] of the Day
Central bankers are coy about gold’s importance as a monetary metal. Former Fed Chair Benjamin Bernanke, at one of our hearings, claimed flatly that gold was not money. When I pressed Bernanke on why, then, do central banks hold gold, he declared that after a long pause that it was merely ‘tradition.’ He had no interest in my suggestion that the gold could be sold off to the American people if it’s not money. The point is that due to today’s impending crisis, many governments are now accumulating more gold—while others are holding onto what they have with the expectation it will once again be used in the monetary system.” – Ron Paul, former Congressman and presidential candidate [Emphasis added]

“Students of monetary history should recall that global growth shrank  in the wake of the Smoot-Hawley Tariff Act of 1930, and the US was forced to devalue the dollar against gold in January 1934 with the result that the gold price rose by 70% (from $20.67 to $35.00).” – Martin Murenbeeld, Gold Monitor newsletter

Chart of the Day

Chart note: This chart demonstrates gold’s strong performance as a portfolio holding over a long period of time. It depicts the average annual price of gold since 1970. It dispels the notion that gold is somehow volatile or unpredictable and as a result unreliable as a long-term portfolio safe haven. To the contrary, it shows gold living up to its reputation as precisely the opposite – stable in the face of rapidly changing economic circumstances, predictable in that it reacts directly to those circumstances and reliable in that has performed as advertised over an extended period of time – the extent of the fiat money era that began in 1971.

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

Gold even on day, speculation about Fed-White House split overhangs markets

DAILY MARKET REPORT

Gold pushed briefly over the$1200 mark in late European trading today on concerns of renewed trade tensions – this time between the United States and the European Union – and continued firming of China’s yuan. As we go to fetch this report to the server, gold is even on the day and trading at the $1296 mark. Silver is down 4¢ at $14.76.

The most pressing issue in the gold market, though, is not the value of the dollar or the trade wars, but the one situation that underlies both – the determinations of the Federal Reserve on interest rate increases and the president’s remarks late last week. Though many expect something of relevance to occur at Jackson Hole, we are in the camp that thinks nothing much will happen there and that the Fed chairman’s speech will be significantly less than controversial. The Fed-White House split and the speculation about who will win out is likely to hang over all the markets, including gold, for some time to come.

Quote of the Day
“Why does the cycle move as it does? What causes these periodic alternations, this ebb and this flow, in the national priorities? If it is a genuine cycle, the explanation must be primarily internal. Each phase must flow out of the conditions – and contradictions – of the phase before and then itself prepare the way for the next recurrence. A true cycle is self-generating. It cannot be determined, short of catastrophe, by external events. Wars, depressions, inflations may heighten or complicate moods, but the cycle itself rolls on, self-contained, self-sufficient and autonomous. . .The roots of cyclical self sufficiency lies deep in the natural life of humanity. There is a cyclical pattern in organic nature — in the tides, in the seasons, in night and day, in the systole and diastole of the human heart.” – Arthur M. Schlesinger, Jr., The Cycles of American History

Chart of the Day

Chart note: As the chart above illustrates, gold does not always react to the start of a crisis as anticipated. As the credit crisis gained momentum in 2008, gold declined as the dollar rose – acting in much the same way it is reacting now to the emerging markets crisis and U.S.-China trade war. It was not until late 2008, when the full extent of the crisis became all too apparent, that it began to move higher. Thereafter, from 2009 to September 2011, it rose to its all-time high of $1895 – a 215% gain in three years.

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Posted in dailyquotes |

DMR–Gold even on the day, speculation about Fed-White House split overhangs markets

DAILY MARKET REPORT

Gold pushed briefly over the$1200 mark in late European trading today on concerns of renewed trade tensions – this time between the United States and the European Union – and continued firming of China’s yuan.  As we go to fetch this report to the server, gold is even on the day and trading at the $1296 mark.  Silver is down 4¢ at $14.76.

The most pressing issue in the gold market, though, is not the value of the dollar or the trade wars, but the one situation that underlies both – the determinations of the Federal Reserve on interest rate increases and the president’s remarks late last week. Though many expect something of relevance to occur at Jackson Hole, we are in the camp that thinks nothing much will happen there and that the Fed chairman’s speech will be significantly less than controversial. The Fed-White House split and the speculation about who will win out is likely to hang over all the markets, including gold, for some time to come.

Quote of the Day
“Why does the cycle move as it does? What causes these periodic alternations, this ebb and this flow, in the national priorities?  If it is a genuine cycle, the explanation must be primarily internal. Each phase must flow out of the conditions – and contradictions – of the phase before and then itself prepare the way for the next recurrence. A true cycle is self-generating. It cannot be determined, short of catastrophe, by external events. Wars, depressions, inflations may heighten or complicate moods, but the cycle itself rolls on, self-contained, self-sufficient and autonomous. . .The roots of cyclical self sufficiency lies deep in the natural life of humanity. There is a cyclical pattern in organic nature — in the tides, in the seasons, in night and day, in the systole and diastole of the human heart.” – Arthur M. Schlesinger, Jr., The Cycles of American History

Chart of the Day

Chart  note:  As the chart above illustrates, gold does not always react to the start of a crisis as anticipated. As the credit crisis gained momentum in 2008, gold declined as the dollar rose – acting in much the same way it is reacting now to the emerging markets crisis and U.S.-China trade war. It was not until late 2008, when the full extent of the crisis became all too apparent, that it began to move higher. Thereafter, from 2009 to September 2011, it rose to its all-time high of $1895 – a 215% gain in three years.

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Gold off marginally in quiet trading early

DAILY MARKET REPORT

Gold was off marginally in early trading – down $2.50 at $1188.50 in a quiet market session thus far. Silver is down 5¢ at $14.76. The precious metals seem to be taking a breather after a strong two-day run to the upside that gathered momentum after Bloomberg shed light on the rift between the White House and the Fed on interest rates. The president also accused China and the EU of manipulating the yuan and euro to gain leverage in the trade wars. Germany announced yesterday recording the largest trade surplus in the world for the third straight year – a performance not likely to escape the notice of the Trump administration. An improving Chinese yuan added to the shift in momentum for gold over the last couple of days. Today, though, gold is down despite the yuan trending to the upside during Asian trading hours indicating that we might see gold go positive before the day is out.

Quote of the Day
“[T]he object of speculation may vary widely from one mania or bubble to the next. It may involve primary products, especially those imported from afar (where the exact conditions of supply and demand are not known in detail), or goods manufactured for export to distant markets, domestic and foreign securities of various kinds, contracts to buy or sell goods or securities, land in the country or city, houses, office buildings, shopping centers, condominiums, foreign exchange. At a late stage, speculation tends to detach itself from really valuable objects and turn to delusive ones. A larger and larger group of people seeks to become rich without a real understanding of the processes involved. Not surprisingly, swindlers and catchpenny schemes flourish.” – Robert Z. Aliber and Charles P. Kindleberger, Manias, Panics and CrashesAnatomy of a Typical Financial Crisis (2001)

Chart of the Day

Chart note: Mapping and comparing secular bull markets is a risky business. No two are exactly the same, but at the same time they do follow a general pattern moving from accumulation to public participation and finally excess mania with ebb and flow occurring at each stage. The Dow Jones Industrial Average began its 1980-2000 secular bull market at 760 and topped at 11,723 – rising roughly 15.5 times. Gold began its secular bull market in 2002 at $280 per ounce. If gold were to match the Dow’s performance, it would rise to $4300 per ounce by 2022 – a 15.5 times gain. That said, the timeline for bull markets can vary – some shorter, others longer. In gold’s secular bull market of the 1970s, it rose 24 times in a ten year period – from $35 per ounce to $850 per ounce. If it were to match that price performance, it would be priced at $6500 per ounce.

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DMR–Gold off marginally in quiet trading early

DAILY MARKET REPORT

Gold was off marginally in early trading – down $2.50 at $1188.50 in a quiet market session thus far.  Silver is down 5¢ at $14.76. The precious metals seem to be taking a breather after a strong two-day run to the upside that gathered momentum after Bloomberg shed light on the rift between the White House and the Fed on interest rates.  The president also accused China and the EU of manipulating the yuan and euro to gain leverage in the trade wars.  Germany announced yesterday recording the largest trade surplus in the world for the third straight year – a performance not likely to escape the notice of the Trump administration.   An improving Chinese yuan added to the shift in momentum for gold over the last couple of days.  Today, though, gold is down despite the yuan trending to the upside during Asian trading hours indicating that we might see gold go positive before the day is out.

Quote of the Day
“[T]he object of speculation may vary widely from one mania or bubble to the next. It may involve primary products, especially those imported from afar (where the exact conditions of supply and demand are not known in detail), or goods manufactured for export to distant markets, domestic and foreign securities of various kinds, contracts to buy or sell goods or securities, land in the country or city, houses, office buildings, shopping centers, condominiums, foreign exchange. At a late stage, speculation tends to detach itself from really valuable objects and turn to delusive ones. A larger and larger group of people seeks to become rich without a real understanding of the processes involved. Not surprisingly, swindlers and catchpenny schemes flourish.” – Robert Z. Aliber and Charles P. Kindleberger, Manias, Panics and CrashesAnatomy of a Typical Financial Crisis (2001)

Chart of the Day

Chart note:  Mapping and comparing secular bull markets is a risky business. No two are exactly the same, but at the same time they do follow a general pattern moving from accumulation to public participation and finally excess mania with ebb and flow occurring at each stage. The Dow Jones Industrial Average began its 1980-2000 secular bull market at 760 and topped at 11,723 – rising roughly 15.5 times. Gold began its secular bull market in 2002 at $280 per ounce. If gold were to match the Dow’s performance, it would rise to $4300 per ounce by 2022 – a 15.5 times gain. That said, the timeline for bull markets can vary – some shorter, others longer. In gold’s secular bull market of the 1970s, it rose 24 times in a ten year period – from $35 per ounce to $850 per ounce. If it were to match that price performance, it would be priced at $6500 per ounce. 

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

Afternoon Update

(USAGOLD – August 20, 2018) – Gold gained some momentum today following Friday’s strong close while the dollar weakened a bit. The metal is  up $17 over the past two trading sessions at $1190.  Silver is down 4¢ at $14.77. Gold was moving sideways until Bloomberg broke the story posted below that the president nominated Jerome Powell for the Fed job thinking he would be a “cheap money” Fed chairman.  Mr. Trump went on to say that he was “not thrilled” with recent rate hikes.  A stronger yuan based on upcoming trade talks between the US and China also helped boost gold.

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Posted in Today's top gold news and opinion |

Bridging the ‘fourth turning’ with gold


The Fourth Turning – the influential work by William Strauss and Neil Howe published in 1997 – uncannily predicted much of what has happened in America over the past twenty years. “The next Fourth Turning,” the authors predicted, “is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation, and empire.”

Howe designates 2008 as the start date for the current fourth turning. Since turnings typically last 20-23 years, it will end sometime between 2028 and 2031. That puts us about midway through the cycle. At the moment, if the politicians, Wall Street and press accounts on the status of the economy are to be believed, the good times have arrived. For many Americans, though, that arrival has some pretty dark clouds hanging over it – the deep political divisions, the escalating trade wars, the emerging nation debt and currency crisis, the overvalued stock market, the threat of rising interest rates – and that is just a sampling of fourth-turning strata that worries global investors. The nation despite the rosy outlook is a bit unnerved by it all. For his part, Howe, who saw it coming, believes things could get much worse before before they get better.

“The fourth turning,” he said in a MacroVoices interview last August, “is the final season of history, if you will, the final generation. And that is the period of crisis. That is the period when we tear down institutions that we’ve built, everything that’s dysfunctional. And we sort of rebuild things from scratch again. And it usually follows a period where—it’s bound up in a period – where there’s complete disgust, complete distrust with what we have.”

There is a certain amount of inevitability interlaced throughout Howe’s analysis and a good many will have a hard time accepting it for that reason – especially those who believe that somehow this period in economic history is going to be different from others. Howe though sees strong similarities to the period just before and after World War II, the last fourth turning.

Once again his viewpoint, expressed almost a year ago, is uncanny: “And then the crisis,” he says, “when all of these problems begin to coalesce into one huge problem. It’s when the Great Depression met all of these—the rise of fascism both in Asia and in Europe, and everything came together, currency wars, everything became part of a huge problem. Which, by the resolution, you see—and this is what happens at every fourth turning. All the little problems come together into a giant problem. And then the giant problem gets completely resolved.”


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Is that not where we find ourselves today – in the current fourth turning?

“. . .I would say these are strong parallels that we see between the decade we’ve been living through and the 1930s,” he says. “Because it isn’t just what happens to/in the economy. I mean, you consider so many ways in which this last decade has recapitulated the 1930s, starting off with a financial crisis, worries about deflation, worries about declining fertility rates, and currency wars, and beggar thy neighbor policies, and radical attempts by monetary and ultimately fiscal policy to remedy the situation.”

Howe has something of a philosophical partner in the great Russian novelist, Leo Tolstoy who examined the role of fate in human affairs in his masterpiece novel, War and Peace. I am among the group that believes we are carried on great waves of history whether we like or not – what Tolstoy referred to as an historic “fatalism” to which we are all subject:

*We are forced to fall back on fatalism as an explanation of irrational events (that is to say, events the reasonableness of which we do not understand). The more we try to explain such events in history reasonably, the more unreasonable and incomprehensible do they become to us. Each man lives for himself, using his freedom to attain his personal aims, and feels with his whole being that he can now do or abstain from doing this or that action; but as soon as he has done it, that action performed at a certain moment in time becomes irrevocable and belongs to history, in which it has not a free but a predestined significance.

There are two sides to the life of every man, his individual life, which is the more free the more abstract its interests, and his elemental hive life in which he inevitably obeys laws laid down for him. Man lives consciously for himself, but is an unconscious instrument in the attainment of the historic, universal, aims of humanity. A deed done is irrevocable, and its result coinciding in time with the actions of millions of other men assumes an historic significance. The higher a man stands on the social ladder, the more people he is connected with and the more power he has over others, the more evident is the predestination and inevitability of his every action. ‘The king’s heart is in the hands of the Lord.’ A king is history’s slave.” – Leo Tolstory, War and Peace

Like Howe, I too believe that the “giant problem” will somehow find resolution, but my concern is getting across the bridge between the “final season of history” and its ultimate resolution – whatever fate might dictate. That is why I own gold personally and why I think every thinking investor should own it as well. The name of the game is to protect wealth and not leave the results of your life work on the table as the fourth turning moves into its final phases.

A diversification of about 10%-30%, in my view, will get the job done as it did in the first phases of the crisis from 2008-2009.* How high you go within that range depends upon on how strongly you feel about the dangers that lie ahead.

–– Michael J. Kosares, USAGOLD


Neil Howe interview (Courtesy of MacroVoices/Audio version)

* During the early stages of the crisis that began in 2008, gold moved sharply to the downside. In January, 2008 the metal was trading in the $900 range. By October, as the first wave of the crisis washed over the financial markets, it had fallen to $730 – a decline of roughly 20%. Then as the full extent of the financial crisis became apparent and the Fed introduced money printing measures, it began to rise reaching $880 by the end of 2008. From 2009 to September 2011, gold rose to its all-time high of $1895 – a 215% gain in three years.

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Gold firms on stronger yuan, yen, contagion concerns

DAILY MARKET REPORT

Gold firmed overnight beginning in Asia and the positive trend carried over to New York at the open. The precious metal is now priced at $1179.50 and up $4 on the day. Silver is up 6¢ on the day at $14.72. A stronger Chinese yuan and Japanese yen are the chief influences with weak stock markets in Asia and Europe adding to the flow of interest in the direction of precious metals. Commodity prices also firmed overnight led by oil and natural gas up 1.1% and 1.6% respectively as we upload this report to the server. The Turkish lira returned to the downside this morning as measures taken by the government appear to have worn off – a turn of events likely to reinvigorate global concern about an emerging market contagion.

Quote of the Day
“To suppose that the value of a common stock is determined purely by a corporation’s earnings discounted by the relevant interest rates and adjusted for the marginal tax rate is to forget that people have burned witches, gone to war on a whim, risen to the defense of Joseph Stalin and believed Orson Welles when he told them over the radio that the Martians had landed.” – James Grant, Interest Rate Observer

Chart of the Day

Chart note: The direct relationship between growth in the federal debt and the price of gold. The national debt, by the way, now stands at $21.372 trillion with $880 billion added so far in 2018.

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DMR–Gold firms on stronger yuan, yen, global contagion concerns

DAILY MARKET REPORT

Gold firmed overnight beginning in Asia and the positive trend carried over to New York at the open.  The precious metal is now priced at $1179.50 and up $4 on the day.  Silver is up 6¢ on the day at $14.72. A stronger Chinese yuan and Japanese yen are the chief influences with weak stock markets in Asia and Europe adding to the flow of interest in the direction of precious metals. Commodity prices also firmed overnight led by oil and natural gas up 1.1% and 1.6% respectively as we upload this report to the server. The Turkish lira returned to the downside this morning as measures taken by the government appear to have worn off – a turn of events likely to reinvigorate global concern about an emerging market contagion.

Quote of the Day
“To suppose that the value of a common stock is determined purely by a corporation’s earnings discounted by the relevant interest rates and adjusted for the marginal tax rate is to forget that people have burned witches, gone to war on a whim, risen to the defense of Joseph Stalin and believed Orson Welles when he told them over the radio that the Martians had landed.” – James Grant, Interest Rate Observer

Chart of the Day

Chart note:  The direct relationship between growth in the federal debt and the price of gold. The national debt, by the way, now stands at $21.372 trillion with $880 billion added so far in 2018.

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

Gold up on China trade delegation news

Gold is up this morning on overnight news that China is sending a delegation to the United States at the end of August for trade talks. At the time the announcement came public during Asian trading hours, gold was tracking sharply to the downside.  It abruptly reversed course on the news from the $1170 level.  In early New York trading, it is now up $5.00 on the day at $1179.  Silver is up 24¢ at $14.68. The Chinese yuan also reversed course.

The markets are likely to be cautious about these upcoming talks that come at the invitation of the United States.  We have already had several false starts in the negotiations.  On the plus side, though, the participants have now gotten a glimpse of a full-out trade war’s implications and the sight isn’t pretty.  Such realizations offer plenty of incentive on both sides to settle the matter and move on.

Also assisting gold, the Turkish lira is higher for the second straight day.  Generally speaking, the dollar weakened against currencies across the boards against both emerging and developed market currencies. With it, the threat to emerging markets seems to have receded somewhat.

Quote of the Day
“If history teaches anything, it is that government cannot be trusted to manage money. When currency is not redeemable in gold, its value depends entirely on the judgment and the conscience of the politicians. (That is the situation in this country today.) Especially in an economic crisis or a war, the pressure to inflate becomes overwhelming. Any alternative may seem politically disastrous. Whether it be the Roman emperors repeatedly debasing their coinage, the French revolutionary government printing a flood of assignats, John Law flooding France with debased money, or the Continental Congress issuing money until it was literally “not worth a Continental,” the story is similar. A government in financial straits finds its easiest recourse is to issue more and more money until the money loses its value. The entire process is accompanied by a barrage of explanations, propaganda and new regulations which hide the true situation from the eyes of most people until they have lost all their savings.” – Scientific Market Analysis

Chart of the Day

Chart note: “In 1982, back when I was a toddler,” says Sovereign Man’s Simon Black, “the price of a Ford Mustang was $6,572. Today the cheapest Mustang starts at $25,680 according to Ford’s website. So a Mustang today is around 4x as expensive as it was 36 years ago. US Labor Department data from 1982 shows that average earnings were $309 per week, or $16,086 per year. That was enough to buy 2.45 Mustangs. Today’s earnings are $881 per week, or $45,812 per year. That’s only enough to buy 1.78 Mustangs.” A good way to fill the gap is through gold ownership. A long-term gold holding has more than compensated for the destruction of the currency for those with patience and an understanding of the forces at work in the modern economy. The chart above on the purchasing power of the dollar and gold since 1971 speaks volumes.

 

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DMR–Gold up on China trade delegation news

DAILY MARKET REPORT

Gold is up this morning on overnight news that China is sending a delegation to the United States at the end of August for trade talks. At the time the announcement came public during Asian trading hours, gold was tracking sharply to the downside.  It abruptly reversed course on the news from the $1170 level.  In early New York trading, it is now up $5.00 on the day at $1179.  Silver is up 24¢ at $14.68. The Chinese yuan also reversed course.

The markets are likely to be cautious about these upcoming talks that come at the invitation of the United States.  We have already had several false starts in the negotiations.  On the plus side, though, the participants have now gotten a glimpse of a full-out trade war’s implications and the sight isn’t pretty.  Such realizations offer plenty of incentive on both sides to settle the matter and move on.

Also assisting gold, the Turkish lira is higher for the second straight day.  Generally speaking, the dollar weakened against currencies across the boards against both emerging and developed market currencies. With it, the threat to emerging markets seems to have receded somewhat.

Quote of the Day
“If history teaches anything, it is that government cannot be trusted to manage money. When currency is not redeemable in gold, its value depends entirely on the judgment and the conscience of the politicians. (That is the situation in this country today.) Especially in an economic crisis or a war, the pressure to inflate becomes overwhelming. Any alternative may seem politically disastrous. Whether it be the Roman emperors repeatedly debasing their coinage, the French revolutionary government printing a flood of assignats, John Law flooding France with debased money, or the Continental Congress issuing money until it was literally “not worth a Continental,” the story is similar. A government in financial straits finds its easiest recourse is to issue more and more money until the money loses its value. The entire process is accompanied by a barrage of explanations, propaganda and new regulations which hide the true situation from the eyes of most people until they have lost all their savings.” – Scientific Market Analysis

Chart of the Day

Chart note: “In 1982, back when I was a toddler,” says Sovereign Man’s Simon Black, “the price of a Ford Mustang was $6,572. Today the cheapest Mustang starts at $25,680 according to Ford’s website. So a Mustang today is around 4x as expensive as it was 36 years ago. US Labor Department data from 1982 shows that average earnings were $309 per week, or $16,086 per year. That was enough to buy 2.45 Mustangs. Today’s earnings are $881 per week, or $45,812 per year. That’s only enough to buy 1.78 Mustangs.” A good way to fill the gap is through gold ownership. A long-term gold holding has more than compensated for the destruction of the currency for those with patience and an understanding of the forces at work in the modern economy. The chart above on the purchasing power of the dollar and gold since 1971 speaks volumes.

 

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

Gold pushes to eighteen-month how amidst global financial damage

Gold pushed to an eighteen-month low this morning in concert with significant damage to global stocks, commodity prices and currency values. The run of headlines posted further down the page tells the somewhat frightening tale. The dollar, though, continued to stand tall amidst the ongoing global asset destruction. As this report is posted, gold is trading at $1183 and down $11 on the day. Silver is down 36¢ at $14.67.

Yesterday we posted a link to articles from the Financial Times and New York Times about Tim Lee, a British economist who predicted Turkey’s demise in 2011. The summary of his thinking provided by NYT sticks in the mind:

“The river of global cash will dry up, the dollar will spike and there will be a series of financial seizures. Investors, he thinks, will flee developing economies, then Europe and eventually the American stock and bond markets. ‘It won’t be a banking crisis this time around — it will be a financial market crisis,’ Mr. Lee said. ‘And I am very confident that it will happen.’”

“Turkey,” he says, “is the canary in the coal mine.” One cannot help but be concerned that in this complacent summer of 2018 it might have already begun.

Quote of the Day
“China has a messy banking system, and politics that appear far more complicated than they did only a matter of months ago. The criticism emerging of Mr Xi, and finding its way into the foreign press, suggests that his position is not as strong as outsiders had assumed. And Chinese financial policy tends to be less an elaborate long-term plan, and more a series of reactive measures to ensure the continued survival of the Communists. None of this renders the Chinese exchange rate any less important. It just makes it far harder to understand than the Fed Funds rate or the Treasury yield. We should all of us make an effort to understand it.” – John Authers, Financial Times columnist

Chart[s] of the Day

Chart notes: These nearly identical charts plot the course of the yuan and gold since the trade war between the United States and China began in April of this year. Since the beginning of April, the yuan is down 9.3% and gold 8.8%.

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Posted in dailyquotes |

DMR-Gold pushes to eighteen-month low amidst global financial damage

Gold pushed to an eighteen-month low this morning in concert with significant damage to global stocks, commodity prices and currency values.  The run of headlines posted further down the page tells the somewhat frightening tale.  The dollar, though, continued to stand tall amidst the ongoing global asset destruction. As this report is posted, gold is trading at $1183 and down $11 on the day.  Silver is down 36¢ at $14.67.

Yesterday we posted a link to articles from the Financial Times and New York Times about Tim Lee, a British economist who predicted Turkey’s demise in 2011. The summary of his thinking provided by NYT sticks in the mind:

“The river of global cash will dry up, the dollar will spike and there will be a series of financial seizures. Investors, he thinks, will flee developing economies, then Europe and eventually the American stock and bond markets. ‘It won’t be a banking crisis this time around — it will be a financial market crisis,’ Mr. Lee said. ‘And I am very confident that it will happen.’”

“Turkey,” he says, “is the canary in the coal mine.” One cannot help but be concerned that in this complacent summer of 2018 it might have already begun.

Quote of the Day
“China has a messy banking system, and politics that appear far more complicated than they did only a matter of months ago. The criticism emerging of Mr Xi, and finding its way into the foreign press, suggests that his position is not as strong as outsiders had assumed. And Chinese financial policy tends to be less an elaborate long-term plan, and more a series of reactive measures to ensure the continued survival of the Communists. None of this renders the Chinese exchange rate any less important. It just makes it far harder to understand than the Fed Funds rate or the Treasury yield. We should all of us make an effort to understand it.” – John Authers, Financial Times columnist

Chart[s] of the Day

Chart notes:  These nearly identical charts plot the course of the yuan and gold since the trade war between the United States and China began in April of this year. Since the beginning of April, the yuan is down 9.3% and gold 8.8%.

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

Gold plunges below $1200 as contagion spreads

This morning gold went below the $1200 mark in European trading as the threat of a systemic contagion spread among emerging countries. It is now down $9 as New York trading opens at $1202. Silver is down 7¢ at $15.23.

“Volatility is likely to remain higher in the week ahead amid a lack of liquidity,” says Investopedia’s Mark Clayton, “and emerging-market fears will likely underpin gold. Positioning data should increase the potential for strong support near $1,200 per ounce, with sharp gains if the U.S. administration talks down the dollar.” One thing is certain: If something is not done to bring the greenback to heel, we are going to have a major mess on our hands. I suspect that the White House will be a busy place this morning with a potential global currency crisis at the top of the agenda.

The fact that emerging country investors are flocking to gold in record numbers speaks volumes about its safe haven reputation. There are circumstances under which price performance takes a back seat to the simple act of insuring one’s assets. A spreading contagion is one of them.

Quote of the Day
“Problems are likely to continue in emerging markets, compounded by rising interest rates and the US Fed’s monetary policy which has drained global dollar liquidity. We have already seen the impact on the Turkish and Argentinian currencies. We remain concerned about geo-political problems including Brexit, North Korea and the Middle East, at a time when populism is spreading globally. The resolution of these problems in this unpredictable era will surely be difficult. In 9/11 and in the 2008 financial crisis, the powers of the world worked together with a common approach. Co-operation today is proving much more difficult. This puts at risk the post-war economic and security order. In the circumstances our policy is to maintain our limited exposure to quoted equities and to enter into new commitments with great caution.” – Lord Jacob Rothschild, RIT Capital Partners, Half-Yearly Financial Report, June 30, 2018

Chart of the Day

Chart note: When the United States abandoned the gold standard in 1971 and freed currencies to float against one another, the fiat money era began. We are still in that era today. This chart shows the performance of gold from the early 1900s to 1971 when gold backed the dollar, and the era from 1971 to present when it did not. Gold has had its ups and down since 1971, but clearly, over the long run, in the absence of an official gold standard, individual investors have been well-served by putting themselves on a private gold standard.

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DMR–Gold plunges below $1200 as contagion spreads

DAILY MARKET REPORT

This morning gold went below the $1200 mark in European trading as the threat of a systemic contagion spread among emerging countries. It is now down $9 as New York trading opens at $1202.  Silver is down 7¢ at $15.23.

“Volatility is likely to remain higher in the week ahead amid a lack of liquidity,” says Investopedia’s Mark Clayton, “and emerging-market fears will likely underpin gold. Positioning data should increase the potential for strong support near $1,200 per ounce, with sharp gains if the U.S. administration talks down the dollar.”  One thing is certain: If something is not done to bring the greenback to heel, we are going to have a major mess on our hands.  I suspect that the White House will be a busy place this morning with a potential global currency crisis at the top of the agenda.

The fact that emerging country investors are flocking to gold in record numbers speaks volumes about its safe haven reputation. There are circumstances under which price performance takes a back seat to the simple act of insuring one’s assets.  A spreading contagion is one of them.

Quote of the Day
“Problems are likely to continue in emerging markets, compounded by rising interest rates and the US Fed’s monetary policy which has drained global dollar liquidity. We have already seen the impact on the Turkish and Argentinian currencies. We remain concerned about geo-political problems including Brexit, North Korea and the Middle East, at a time when populism is spreading globally. The resolution of these problems in this unpredictable era will surely be difficult. In 9/11 and in the 2008 financial crisis, the powers of the world worked together with a common approach. Co-operation today is proving much more difficult. This puts at risk the post-war economic and security order. In the circumstances our policy is to maintain our limited exposure to quoted equities and to enter into new commitments with great caution.” – Lord Jacob Rothschild, RIT Capital Partners, Half-Yearly Financial Report, June 30, 2018

Chart of the Day

Chart note: When the United States abandoned the gold standard in 1971 and freed currencies to float against one another, the fiat money era began. We are still in that era today. This chart shows the performance of gold from the early 1900s to 1971 when gold backed the dollar, and the era from 1971 to present when it did not. Gold has had its ups and down since 1971, but clearly, over the long run, in the absence of an official gold standard, individual investors have been well-served by putting themselves on a private gold standard.

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

US tax reform drains more dollars from global economy than Fed

Financial Times/Delphine Strauss/6-20-2018

“US companies repatriating profits drained more dollars from global markets in the first quarter of the year than did the Federal Reserve’s actions to shrink its balance sheet, according to data that suggests embattled emerging markets cannot simply blame the Fed for their plight.”

USAGOLD note:  Interesting factoid to blend into the general analysis. . . . . .

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Posted in Today's top gold news and opinion |

Gold trading circumspectly this morning, quiet summer day in markets

DAILY MARKET REPORT

Gold is trading circumspectly this morning in and around the $1275 mark and level with yesterday’s closing number. Silver is also running sideways. A statement from Fed chairman Powell that the central bank will stay the course on raising interest rates, which normally might have undermined the price, is balanced with concerns about the intensifying trade war between the U.S. and China. The commodities complex and U.S. dollar are also level on the day with stocks displaying marginal weakness. In short. . .a quiet day summer day in the markets.

Quote of the Day
“If we don’t quite know what the future holds, there is little point in getting carried away by very fancy mathematical calculations of optimal portfolios. Don’t rely on past data to be a good guide. Try to think through what mix of assets gives you the best chance of surviving some big event. That must mean including assets that are negatively correlated or uncorrelated in your portfolio. . . .And I am very struck by the fact that over many many years, central banks, governments and individuals have always, despite the protestations of economists, held some gold in their portfolio. Obviously, there is no high running return, but when unexpected things happen, particularly when governments rise and fall, then gold is a means of payment that everyone is always prepared to accept. And I think that’s why even central banks have always had a role in their portfolios for gold.” – Mervyn King, former Governor of the Bank of England

Chart of the Day

Chart note: When the United States abandoned the gold standard in 1971 and freed currencies to float against one another, the fiat money era began. We are still in that era today. This chart shows the performance of gold from the early 1900s to 1971 when gold backed the dollar, and the era from 1971 to present when it did not. Gold has had its ups and down since 1971, but clearly, over the long run, in the absence of an official gold standard, individual investors have been well-served by putting themselves on a private gold standard, as Mervyn King suggests above.

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Better Business Bureau Five Star Review

__________________________________________________

Recent Better Business Bureau Client Review

“Thank you so much for your high rating for USAGOLD, Denver. They were recommended by a close friend and I researched them on your website in Oct 2009 and have been in touch with them ever since. I am now in full trust with their extraordinary business of great integrity and expertise. I will always deal with them . . Again, thank you for your expert ratings.” – Elan C., 8-29-2017

Scorecard: 38 45 five star reviews. Zero complaints.
A+ rating. Accredited since 1991.

[Link]

USAGOLD Recommendation: The precious metals industry is unique in the financial industry in that it is not subject to oversight or regulation by third-party government entities like the SEC or CFTC. As such, marketplace forums and feedback sites often serve as a replacement for investors attempting due diligence. While several options can be found, by far the most impartial and least susceptible to vested influence is the Better Business Bureau. When looking at a company’s BBB profile, don’t focus solely on the rating. To be honest, pretty much everybody has an ‘A’ or ‘A+’ rating. What is far more important to assess is the number and nature of complaints, number and caliber of positive and negative reviews, longevity with the BBB, as well as the number of ‘stars’ given a company through the actual customer review system.

__________________________________________________

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USAGOLD – Quality service and pricing since 1973

USAGOLD ranks among the most reputable gold companies in the United States with several thousand clients and multi-millions in annual revenue. Founded in the 1970s and still family-owned, we are one of the oldest and most respected names in the gold industry. Our unblemished, zero-complaints record and solid reviews with the Better Business Bureau testify to the exceptional customer service and professional excellence which sets us apart from the competition.

USAGOLD specializes in gold and silver coins and bullion delivered to our client’s safekeeping. For over 45 years, we have resolutely advocated owning precious metals for asset preservation purposes rather than speculation. Admittedly, this philosophy does not resonate with all prospective gold and silver owners, but if it does with you, we think you will find our firm a kindred spirit.

When it comes time to pursue your first (or next) purchase, we invite you to learn first-hand why so many have chosen USAGOLD as their precious metals firm.

Call or drop us an e-mail.

1-800-869-5115
Ext#100
orderdesk@usagold.com

To end right, start right.
Choose the right portfolio mix with the right firm at the right price.
Choose USAGOLD – reliably serving physical gold and silver investors since 1973.
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