Author Archives: Daily Market Report

News Alert: US will suspend tariffs if China changes economic policies

Money and Markets/J.T. Crowe/11-29-2018

“The Wall Street Journal is reporting that the United States and China are pursuing a deal to defuse trade tensions and boost markets, in which the Trump administration will hold off on further tariffs through spring as the two sides work on a deal. The talks include “big changes in Chinese economic policy,” according to U.S. and Chinese officials.”

USAGOLD note: A rare optimistic assessment of the upcoming Trump-Xi conclave in Buenos Aires . . . .

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Posted in Today's top gold news and opinion |

Optimism creeps quietly into gold market with Powell’s dovish tilt

Optimism crept quietly into the gold market beginning about mid-day yesterday. It took the form of a $6 advance immediately following Fed chairman Powell’s dovish tilt in a speech before the Economic Club of New York. It then gathered pace overnight in Asian and European markets and carried over to the U.S. open. Gold is now trading at $1226 and up $5 from yesterday’s FOREX close. Silver is up 5¢ at $14.37.

Some will see yesterday’s remarks as acquiescence to the president who two days ago said he was “not even a little bit happy” with the Fed chairman. Others will see it as a needed adjustment to worrying signs beginning to surface in the economy mostly centered around wobbly stock and bond markets and an overly strong dollar. Perhaps, in the end, it is a little of both. . . .

Also helping gold this morning are reports that Saudi Arabia is pushing hard behind the scenes for oil production cutbacks to address falling prices and a report from Reuters that Russia is “becoming increasingly convinced it needs to reduce oil output in tandem with OPEC.”

Quote of the Day
“Gold is scarce. It’s independent. It’s not anybody’s obligation. It’s not anybody’s liability. It’s not drawn on anybody. It doesn’t require anybody’s imprimatur to say whether it’s good, bad, or indifferent, or to refuse to pay. It is what it is, and it’s in your hand.” – Simon Mikhailovich, Tocqueville Funds (with thanks to Ron Stoeferle and Mark Valek at Incrementum AG)

Chart of the Day

Chart note: As we head into the final month of the year, we thought it might be a good time to post a chart on gold’s performance thus far in 2018. As of November 23, gold is down 5.1% on the year. The downside is not as amplified as the day-to-day headlines might suggest and for value investors, the upturn over the last several weeks might indicate a change in sentiment and direction for the gold market – particularly with the latest stock market weakness taken into account and the Fed chairman’s migration to a dovish tilt in comments before the Economic Club of New York yesterday.

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DMR–Optimism creeps quietly into gold market with Powell’s dovish tilt

DAILY MARKET REPORT

Optimism crept quietly into the gold market beginning about mid-day yesterday. It took the form of a $6 advance immediately following Fed chairman Powell’s dovish tilt in a speech before the Economic Club of New York. It then gathered pace overnight in Asian and European markets and carried over to the U.S. open.  Gold is now trading at $1226 and up $5 from yesterday’s FOREX close.  Silver is up 5¢ at $14.37.

Some will see yesterday’s remarks as acquiescence to the president who two days ago said he was “not even a little bit happy” with the Fed chairman.  Others will see it as a needed adjustment to worrying signs beginning to surface in the economy mostly centered around wobbly stock and bond markets and an overly strong dollar.  Perhaps, in the end, it is a little of both. . . .

Also helping gold this morning are reports that Saudi Arabia is pushing hard behind the scenes for oil production cutbacks to address falling prices and a report from Reuters that Russia is “becoming increasingly convinced it needs to reduce oil output in tandem with OPEC.”

Quote of the Day
“Gold is scarce. It’s independent. It’s not anybody’s obligation. It’s not anybody’s liability. It’s not drawn on anybody. It doesn’t require anybody’s imprimatur to say whether it’s good, bad, or indifferent, or to refuse to pay. It is what it is, and it’s in your hand.” – Simon Mikhailovich, Tocqueville Funds (with thanks to Ron Stoeferle and Mark Valek at Incrementum AG)

Chart of the Day

Chart note:  As we head into the final month of the year, we thought it might be a good time to post a chart on gold’s performance thus far in 2018.  As of November 23, gold is down 5.1% on the year.  The downside is not as amplified as the day-to-day headlines might suggest and for value investors, the upturn over the last several weeks might indicate a change in sentiment and direction for the gold market – particularly with the latest stock market weakness taken into account and the Fed chairman’s migration to a dovish tilt in comments before the Economic Club of New York yesterday.

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DMR Update–Gold bolts higher on Powell comments

(USAGOLD, Wednesday 11/28/2018) – Gold bolted $6 higher immediately after Fed chairman Jerome Powell stated in a speech that interest rates are “just below” the neutral range, an indication that the Fed might slow interest rate increases in 2019. It is now trading at $1220.50, up $6 on the day. Silver is up 16¢ at $14.33.

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DMR Update – Gold bolts higher on Powell comments

(USAGOLD, Wednesday 11/28/2018) – Gold bolted $6 higher immediately after Fed chairman Jerome Powell stated in a speech that interest rates are “just below” the neutral range, an indication that the Fed might slow interest rate increases in 2019.  It is now trading at $1220.50, up $6 on the day.  Silver is up 16¢ at $14.33.

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Posted in Today's top gold news and opinion |

Here’s what to expect from Fed Chief Powell’s most important speech yet

CNBC/Jeff Cox/11-28-2018

“Fed Chairman Jerome Powell is delivering a speech Wednesday that one strategist says ‘may be the most consequential’ of his term to date.”

USAGOLD note:  An interesting array of opinion from Wall Streeters on what the Fed chair might try to accomplish in his speech today.

 

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No DMR today. . . .

. . . . but please check back.  We will post an update if anything of interest develops.

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Trump attacks Fed Chairman Powell: ‘I’m not even a little bit happy with my selection of Jay’

CNBC/Christine Wang/11-27-2018

“‘I’m doing deals and I’m not being accommodated by the Fed,’ Trump told the Post. ‘They’re making a mistake because I have a gut and my gut tells me more sometimes than anybody else’s brain can ever tell me.'”

USAGOLD note:  Is a shake-up coming at the Fed? Wall  Street’s attention will be focused on Chairman Powell’s speech today at the Economic Club of New York.

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DMR Update–Clarida comments tank gold market

No sooner had we posted today’s DMR than Fed Vice Chair Richard Clarida gave a speech widely interpreted as ‘hawkish’ on interest rates. Gold immediately spiked lower in response.  It is now down $8.75 on the day at $1214.  Silver is down 10¢ at $14.16. Clarida tried to strike a middle-ground stance, but the markets are not reading it that way.

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DMR update–Clarida comments tank gold market

No sooner had we posted today’s DMR than Fed Vice Chair Richard Clarida gave a speech widely interpreted as ‘hawkish’ on interest rates. Gold immediately spiked lower in response.  It is now down $8.75 on the day at $1214.  Silver is down 10¢ at $14.16. Clarida tried to strike a middle-ground stance, but the markets are not reading it that way.

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Gold tracking in a narrow range, president says ‘Fed a bigger problem than China’

Gold is tracking within a narrow range this morning essentially taking a wait-and-see approach to a number of issues on the event calendar. Caution prevails. Topping the list are policy speeches from top Fed officials, tenuous talks between China and the United States at the upcoming G-20 conference and lingering concerns about vulnerable global stock markets. Gold made an attempt to go higher in Europe overnight then thought better of it – now at $1222 and down $1 on the day. Silver, similarly disposed, is up 2¢ on the day at $14.27. The president has little doubt about what tops the economic agenda these days. “I think the Fed right now is a much bigger problem than China,” he said in an interview yesterday.

Quote of the Day
“Europe has brought us a depression worse than 1929. It has led to entire peoples being broken and humiliated, like the Greeks, all for the sake of preserving the infernal instrument of the euro. This whole disaster has been adorned by a chain of lies, shouted ever louder because they are afraid that the colossal damage they have done will be discovered.” – Claudio Borghi, Catholic University of Milan

Chart of the Day


Chart courtesy of the World Gold Council

Chart note: This chart shows global net gold ETF assets in tonnes since their inception in 2004. Note the steady overall growth since 2016. Generally speaking, ETFs are the preferred method for gold ownership among funds and institutions. For market-watchers, it indicates the level of interest among major market participants. As you can see North American growth is up marginally since the beginning of 2016 but European interest has grown markedly. In the United States, stock market over-valuation and interest rates head up fund and institutional concern. Brexit and the possibility of a instability in Italy are at the forefront of European investor concerns.

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Posted in dailyquotes |

DMR–Gold tracking in a narrow range, president says ‘Fed a bigger problem than China’

DAILY MARKET REPORT

Gold is tracking within a narrow range this morning essentially taking a wait-and-see approach to a number of issues on the event calendar.  Caution prevails. Topping the list are policy speeches from top Fed officials, tenuous talks between China and the United States at the upcoming G-20 conference and lingering concerns about vulnerable global stock markets. Gold made an attempt to go higher in Europe overnight then thought better of it – now at $1222 and down $1 on the day.  Silver, similarly disposed, is up 2¢ on the day at $14.27.  The president has little doubt about what tops the economic agenda these days. “I think the Fed right now is a much bigger problem than China,” he said in an interview yesterday.

Quote of the Day
“Europe has brought us a depression worse than 1929. It has led to entire peoples being broken and humiliated, like the Greeks, all for the sake of preserving the infernal instrument of the euro. This whole disaster has been adorned by a chain of lies, shouted ever louder because they are afraid that the colossal damage they have done will be discovered.” – Claudio Borghi, Catholic University of Milan

Chart of the Day


Chart courtesy of the World Gold Council

Chart note:  This chart shows global net gold ETF assets in tonnes since their inception in 2004.  Note the steady overall growth since 2016. Generally speaking, ETFs are the preferred method for gold ownership among funds and institutions.  For market-watchers, it indicates the level of interest among major market participants.  As you can see North American growth is up marginally since the beginning of 2016 but European interest has grown markedly.  In the United States, stock market over-valuation and interest rates head up fund and institutional concern.  Brexit and the possibility of a instability in Italy are at the forefront of European investor concerns.

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

Where to invest $1 million right now

Bloomberg/Frederik Balfour/11-27-2018

“Because of my family background—my grandfather founded Lee Cheong Gold Dealers in Hong Kong in 1950—I believe in the physicality of gold. I would buy a million dollars’ worth of bullion bars and stuff them under my mattress. Gold has underperformed the S&P 500 index for the past five years. SPX has delivered 46 percent in that time, and gold has lost 1 percent. In the next 10 years gold is one of the best contrarian plays. I say buy when no one else does.”

USAGOLD note:  Two of the six Hong Kong-based advisors offering their opinion on where to invest $1 million right now recommended gold . . . . .

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Cramer: ‘I have tremendous contempt for this market’ — it’s a bear market not a correction

CNBC/Matthew Belvedere/11-26-2018

“‘I have tremendous contempt for this market, because every time you try to make money with it, it cuts your heart out. That’s a bear market,’ he argues.”

USAGOLD note:  Cramer is telling people something they really do not want to hear. . . .We suspect he is getting a lot of flak for taking this position.


Image by Tulane Public Relations [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

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Gold pushes marginally higher, shifting sentiment leans in gold’s favor

DAILY MARKET REPORT

Gold pushed marginally higher in early trading – up $2 on the day at $1225. Silver is up 4¢ at $14.33. As we close out November and move into the final month of the year, there has been something of a rhetorial shift at the Fed, hopes for raprochement between the U.S. and China at the Buenos Aires G-20 have been raised and tech stocks have corrected sharply – some market stalwarts by nearly 25%. And then there is Bitcoin’s headline fall from grace – down nearly 40% (!) so far this year (Please see our Chart of the Day.) . . . . If shifting sentiment seems to lean in gold’s favor, it is because the current mood is such a departure from the negative script that has plagued our favorite precious metals for much of the second half of the year.

Oil seems keen to stage a turnaround this morning, but much remains in its way. Gold is better situated having held firm last week while a long list of commodities buckled. We will hope for the best, as many, including now Goldman Sachs, tells us that commodities – including gold – are set for a major turnaround in 2019.

Quote of the Day
“Reflect on what happens when a terrible winter blizzard strikes. You hear the weather warning but probably fail to act on it. The sky darkens. Then the storm hits with full fury, and the air is a howling whiteness. One by one, your links to the machine age break down. Electricity flickers out, cutting off the TV. Batteries fade, cutting off the radio. Phones go dead. Roads become impassible, and cars get stuck. Food supplies dwindle. Day to day vestiges of modern civilization – bank machines, mutual funds, mass retailers, computers, satellites, airplanes, governments – all recede into irrelevance. Picture yourself and your loved ones in the midst of a howling blizzard that lasts several years. Think about what you would need, who could help you, and why your fate might matter to anybody other than yourself. That is how to plan for a saecular winter. Don’t think you can escape the Fourth Turning. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted.” – William Strauss & Neil Howe, The Fourth Turning [1997]

Chart of the Day

Chart courtesy of BarChart.com (Enlarged version)

Chart note: A sea of red. . . .If misery loves company, then gold has plenty of it as we head for the finish line in 2018. Thus far this year, a full fifty of sixty-one entries shown above are in the red – 82% of investments tracked. All in all, it has not been a very good year for financial markets.

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Posted in dailyquotes |

DMR–Gold pushes marginally higher, shifting sentiment leans in gold’s favor

DAILY MARKET REPORT

Gold pushed marginally higher in early trading – up $2 on the day at $1225.  Silver is up 4¢ at $14.33.  As we close out November and move into the final month of the year, there has been something of a rhetorial shift at the Fed, hopes for raprochement between the U.S. and China at the Buenos Aires G-20 have been raised and tech stocks have corrected sharply – some market stalwarts by nearly 25%.  And then there is Bitcoin’s headline fall from grace – down nearly 40% (!)  so far this year (Please see our Chart of the Day.) . . . . If shifting sentiment seems to lean in gold’s favor, it is because the current mood is such a departure from the negative script that has plagued our favorite precious metals for much of the second half of the year.

Oil seems keen to stage a turnaround this morning, but much remains in its way.  Gold is better situated having held firm last week while a long list of commodities buckled. We will hope for the best, as many, including now Goldman Sachs, tells us that commodities – including gold – are set for a major turnaround in 2019.

Quote of the Day
“Reflect on what happens when a terrible winter blizzard strikes. You hear the weather warning but probably fail to act on it. The sky darkens. Then the storm hits with full fury, and the air is a howling whiteness. One by one, your links to the machine age break down. Electricity flickers out, cutting off the TV. Batteries fade, cutting off the radio. Phones go dead. Roads become impassible, and cars get stuck. Food supplies dwindle. Day to day vestiges of modern civilization – bank machines, mutual funds, mass retailers, computers, satellites, airplanes, governments – all recede into irrelevance. Picture yourself and your loved ones in the midst of a howling blizzard that lasts several years. Think about what you would need, who could help you, and why your fate might matter to anybody other than yourself. That is how to plan for a saecular winter. Don’t think you can escape the Fourth Turning. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted.” – William Strauss & Neil Howe, The Fourth Turning [1997]

Chart of the Day

Chart courtesy of BarChart.com (Enlarged version)

Chart note: A sea of red. . . . If misery loves company, then gold has plenty of it as we head for the finish line in 2018. Thus far this year, a full fifty of sixty-one entries shown above are in the red – 82% of investments tracked. All in all, it has not been a very good year for financial markets.

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

Gold refuses to succumb to oil’s bruising fall yesterday – the ‘worst day of an awful year’ for financial markets

DAILY MARKET REPORT

Gold refused to succumb to pressure from a drop in commodities’ markets yesterday, particularly crude oil which dropped a bruising 6% in yesterday’s trading. Oil has recovered a bit this morning – up almost 2% in early trading. Gold, in fact, is up $5 on the day at $1227. Silver is up 13¢ on the day at $14.49. Yesterday was not a particularly good day for financial markets across the boards. Bloomberg labeled it “the worst day of an awful year” that left “no corner of the market unscathed.” Though few, at least publicly, are prepared to press the panic button on stocks, one would have to say that the worrying trends are beginning to look somewhat entrenched. Gold is trying to rise above it all. This will be the last report until Monday. . . Have a Happy Thanksgiving!

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, the Bank of England

Chart of the Day

Chart note: The United States dollar has lost more than 96% of its purchasing power from 1913 to present – a 105 year period. The 2018 dollar is now worth 3.8% the 1913 dollar. Put another way, what the consumer could buy with $1 in 1913, it takes $26 today.

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DMR–Gold refuses to succumb to oil’s bruising fall yesterday – the ‘worst day of an awful year’ for financial markets

DAILY MARKET REPORT

Gold refused to succumb to pressure from a drop in commodities’ markets yesterday, particularly crude oil which dropped a bruising 6% in yesterday’s trading.  Oil has recovered a bit this morning – up almost 2% in early trading.  Gold, in fact, is up $5 on the day at $1227.  Silver is up 13¢ on the day at $14.49. Yesterday was not a particularly good day for financial markets across the boards.  Bloomberg labeled it “the worst day of an awful year” that left “no corner of the market unscathed.” Though few, at least publicly, are prepared to press the panic button on stocks, one would have to say that the worrying trends are beginning to look somewhat entrenched. Gold is trying to rise above it all.  This will be the last report until Monday. . . Have a Happy Thanksgiving!

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, the Bank of England

Chart of the Day

Chart note: The United States dollar has lost more than 96% of its purchasing power from 1913 to present – a 105 year period. The 2018 dollar is now worth 3.8% the 1913 dollar. Put another way, what the consumer could buy with $1 in 1913, it takes $26 today.

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Gold inches higher as stock sell-off becomes more entrenched

DAILY MARKET REPORT

Gold inched higher in quiet pre-Thanksgiving trading – up $1 on the day at $1225. Silver is down 2¢ at $14.43. Gold is attempting an interim base in an around the $1220 mark and searching for a good reason to bolt higher. Stocks are the big story this morning with the DJIA set to open 400 points lower. The NASDAQ, led lower by Apple, looks to open almost 2.5% lower.

Gold continues to gather support the result of dovish Fed rumblings, concerns about the dispute between China and the U.S. and weakness in equity markets – weakness that seemingly becomes more entrenched with each passing day. Goldman Sachs surprised market participants prior to today’s open by advising its clients to get defensive and move a portion of their portfolios to cash because it now offers positive inflation-adjusted returns. “Cash,” says Goldman, “will represent a competitive asset class to stocks for the first time in many years.” We have not seen a recommendation based on that particular rationale in a very long time.

Quote of the Day
“At the quarter-century mark of 1925, the great bull market was under way, and Graham*, then 31, developed what he later described as a ‘bad case of hubris.’ During an early-1929 conversation with business associate Bernard Baruch (about whom he disparagingly observed, ‘He had the vanity that attenuates the greatness of some men’), both agreed that the market had advanced to ‘inordinate heights, that the speculators had gone crazy, that respected investment bankers were indulging in inexcusable high jinks, and that the whole thing would have to end up one day in a major crash.’ Several years later he lamented, ‘What seems really strange now is that I could make a prediction of that kind in all seriousness, yet not have the sense to realize the dangers to which I continued to subject the Account’s4 capital.’ In mid-1929, the equity in the ‘Account’ was a proud $2,500,000; by the end of 1932, it had shrunk to a mere $375,000.” – Frank K. Martin, A Decade of Delusions

* Benjamin Grahm, “The father of value investing”, 1894-1976, Security Analysis (1934) with David Dodd, and The Intelligent Investor (1949).

Chart of the Day

Chart courtesy of OPTIONAlpha

Chart note: We guesstimate that we are somewhere between “Euphoria” and “Anxiety” on stocks and “depression” and “hope” on gold and silver. In short, the time might be right for starting to leg-out of stocks and ladder-into gold. The last time we featured this chart in late September, we put stock market sentiment at somewhere between “Thrill” and “Euphoria” and gold somewhere between “Despondency” and “Depression.”
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DMR-Gold inches higher as stock sell-off becomes more entrenched

DAILY MARKET REPORT

Gold inched higher in quiet pre-Thanksgiving trading – up $1 on the day at $1225.  Silver is down 2¢ at $14.43.  Gold is attempting an interim base in an around the $1220 mark and searching for a good reason to bolt higher.  Stocks are the big story this morning with the DJIA set to open 400 points lower.  The NASDAQ, led lower by Apple, looks to open almost 2.5% lower.

Gold continues to gather support the result of dovish Fed rumblings, concerns about the dispute between China and the U.S.  and weakness in equity markets –  weakness that seemingly becomes more entrenched with each passing day. Goldman Sachs surprised market participants prior to today’s open by advising its clients to get defensive and move a portion of their portfolios to cash because it now offers positive inflation-adjusted returns. “Cash,” says Goldman, “will represent a competitive asset class to stocks for the first time in many years.”  We have not seen a recommendation based on that particular rationale in a very long time.

Quote of the Day
“At the quarter-century mark of 1925, the great bull market was under way, and Graham*, then 31, developed what he later described as a ‘bad case of hubris.’ During an early-1929 conversation with business associate Bernard Baruch (about whom he disparagingly observed, ‘He had the vanity that attenuates the greatness of some men’), both agreed that the market had advanced to ‘inordinate heights, that the speculators had gone crazy, that respected investment bankers were indulging in inexcusable high jinks, and that the whole thing would have to end up one day in a major crash.’ Several years later he lamented, ‘What seems really strange now is that I could make a prediction of that kind in all seriousness, yet not have the sense to realize the dangers to which I continued to subject the Account’s4 capital.’ In mid-1929, the equity in the ‘Account’ was a proud $2,500,000; by the end of 1932, it had shrunk to a mere $375,000.” – Frank K. Martin, A Decade of Delusions

* Benjamin Grahm, “The father of value investing”, 1894-1976, Security Analysis (1934) with David Dodd, and The Intelligent Investor (1949).

Chart of the Day

Chart courtesy of OPTIONAlpha

Chart note: We guesstimate that we are somewhere between “Euphoria” and “Anxiety” on stocks and “depression” and “hope” on gold and silver. In short, the time might be right for starting to leg-out of stocks and ladder-into gold. The last time we featured this chart in late September, we put stock market sentiment at somewhere between “Thrill” and “Euphoria” and gold somewhere between “Despondency” and “Depression.”
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Posted in Daily Market Report, Today's top gold news and opinion |

DMR

No DMR today.  Please check back though.  We will post an update if anything of interest surfaces.

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Posted in Today's top gold news and opinion |

Gold ETF buyers return to market

Scrap Register/11-16-2018

“Both central banks and ETF investors tend to be ‘resilient holders’ of gold, Standard says.”

USAGOLD  note:  ETF inflows are an indication of fund and institution buying.

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Gold-Silver COT reports – Friday release

GoldSeek/11-16-2018

[Last week’s report]

[This week’s full report]

USAGOLD note: Given the strong interest in the record COT short positions in gold and silver, we plan to make these GoldSeek reports a regular Friday feature. So please check back on Friday afternoons for the latest reports. We will make a comment or two when warranted.

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Gold surges $11 at COMEX open on Brexit, Powell comments

DAILY MARKET REPORT

Gold surged at the COMEX open this morning – up $11 at $1225. Silver is up 10¢ at $14.40. We detect two principal factors driving today’s trading. One is ominous and clear-cut – UK’s Brexit woes. The other is less concrete but probably more influential in the marketplace – guarded comments from Fed chairman Powell that came off as an early warning that a change of direction might be brewing at the Fed on interest rates. Suddenly the possibility of a “pause” has entered market thinking. Adding to the “pause” argument, CNBC ran a blazing headline this morning: “Cramer says CEOs are telling him off the record the economy has quickly cooled.” Such anecdotal evidence might be what was behind Powell’s remarks two days ago.

As we mentioned yesterday, the unfolding Fed scenario might serve as incentive for traders to begin squaring the enormous short position at the COMEX which requires buying gold contracts as an offset. With a shaky weekend ahead of us, the prudent course of action might be to buy today.

Quote of the Day
“I remember being told many years ago on a South African game reserve that the buffalo was the most dangerous of the big five game animals. In large part, this is because of the complacency shown towards them relative to the other, more obviously dangerous big five game animals (ie the lion, leopard, rhino and elephant). It’s also a fact that unlike the other big five, the buffalo gives no warning of an imminent charge (see link). It’s complacency that gets you killed, and the same goes for investors with the macro-risks. We all know what the big macro-imbalances are out there, caused by years of loose money, but investors continue to ignore them at their peril.” – Albert Edwards, SocGen

Chart of the Day


Chart note: This interactive chart from the St. Louis Federal Reserve shows the average annual price of gold from 1970 through the present. It demonstrates at a glance gold’s strong performance as a portfolio holding over the long haul and emphasizes its role as a reliable long-term portfolio safe haven.

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DMR-Gold surges $11 at COMEX open on Brexit, Powell comments

DAILY MARKET REPORT

Gold surged at the COMEX open this morning – up $11 at $1225.  Silver is up 10¢ at $14.40.  We detect two principal factors driving today’s trading.  One is ominous and clear-cut – UK’s Brexit woes.  The other is less concrete but probably more influential in the marketplace – guarded comments from Fed chairman Powell that came off as an early warning that a change of direction might be brewing at the Fed on interest rates. Suddenly the possibility of a “pause” has entered market thinking. Adding to the “pause” argument, CNBC ran a blazing headline this morning: “Cramer says CEOs are telling him off the record the economy has quickly cooled.” Such anecdotal evidence might be what was behind Powell’s remarks two days ago.

As we mentioned yesterday, the unfolding Fed scenario might serve as incentive for traders to begin squaring the enormous short position at the COMEX which requires buying gold contracts as an offset.  With a shaky weekend ahead of us, the prudent course of action might be to buy today.

Quote of the Day
“I remember being told many years ago on a South African game reserve that the buffalo was the most dangerous of the big five game animals. In large part, this is because of the complacency shown towards them relative to the other, more obviously dangerous big five game animals (ie the lion, leopard, rhino and elephant). It’s also a fact that unlike the other big five, the buffalo gives no warning of an imminent charge (see link). It’s complacency that gets you killed, and the same goes for investors with the macro-risks. We all know what the big macro-imbalances are out there, caused by years of loose money, but investors continue to ignore them at their peril.” – Albert Edwards, SocGen

Chart of the Day


Chart note:  This interactive chart from the St. Louis Federal Reserve shows the average annual price of gold from 1970 through the present.  It demonstrates at a glance gold’s strong performance as a portfolio holding over the long haul and emphasizes its role as a reliable long-term portfolio safe haven.

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

Gold pushes cautiously higher on Powell reference to economic ‘headwinds’ in 2019

Gold cautiously pushed higher again today as a carryover from yesterday’s strong rise. It is up another $3 in early trading at $1214, and up about $15 over the past two days. Although one could point to any number of factors to explain yesterday’s sudden jump higher, the one thing that stands out is Fed chairman Jerome Powell’s remarks that the U.S. economy could face “headwinds” in 2019. In a clear break with previous public posturing, he cautioned that the Fed would be “thinking about how much further to raise rates and the pace at which we will raise rates.”

However one parses the whole of Powell’s speech and Q&A session yesterday, this revelation provides a hint as to what the Fed chairman might be thinking. It is likely to be read as a loosening of the more hawkish rhetoric in weeks past and perhaps an early indication of a shift at the Fed.

Gold, we believe, is responding to that possibility. It, in fact, might inspire some squaring of the record short postion at the COMEX. At the moment the dollar appears to be leaning toward an upward bias based on what is occurring in Europe (the UK and Italy) and continuing wariness on further easing in China. That reaction might eventually take a back seat though to a softening at the Fed. Silver is up 5¢ on the day at $14.19.

* Bloomberg: Powell says solid economy faces headwinds as Fed mulls rates

Quote of the Day
“This is a terrible fiscal situation we’ve got ourselves into. The administration is doing tax cuts and a spending decrease, but he’s doing them in the wrong order. What we need right now is to focus totally on reducing the debt. We’re in a stage where if nothing is changed, we’re about to go from stagnation to stagflation, with a significant rise in inflation and a wholly significant imbalance in the economy, which is very difficult to anticipate at this stage. But the outlook is not exactly terrific.” – Alan Greenspan, 12/2017, CNBC interview

Chart of the Day

Chart note: The St. Louis Federal Reserve recently released this new chart on tax receipts. It shows corporate tax receipts plummeting and taxes on production and imports rising. This might be a new set of circumstances brought about by the Trump administration’s tax cuts and tariff programs. In the aggregate, tax receipts represented by the thick black line are falling at a time when government debt is expected to increase – and by some accounts increase significantly. For a prescient observation as to what all of this might lead to, we refer you to the quote from Mr. Greenspan immediately above.

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Posted in dailyquotes |

DMR–Gold pushes cautiously higher on Powell reference to economic ‘headwinds’ in 2019

DAILY MARKET REPORT

Gold cautiously pushed higher again today as a carryover from yesterday’s strong rise.  It is up another $3 in early trading at $1214, and up about $15 over the past two days.  Although one could point to any number of factors to explain yesterday’s sudden jump higher, the one thing that stands out is Fed chairman Jerome Powell’s remarks that the U.S. economy could face “headwinds” in 2019. In a clear break with previous public posturing, he cautioned that the Fed would be “thinking about how much further to raise rates and the pace at which we will raise rates.”

However one parses the whole of Powell’s speech and Q&A session yesterday, this revelation provides a hint as to what the Fed chairman might be thinking.  It is likely to be read as a loosening of the more hawkish rhetoric in weeks past and perhaps an early indication of a shift at the Fed.

Gold, we believe, is responding to that possibility. It, in fact, might inspire some squaring of the record short postion at the COMEX.  At the moment the dollar appears to be leaning toward an upward bias based on what is occurring in Europe (the UK and Italy) and continuing wariness on further easing in China.  That reaction might eventually take a back seat though to a softening at the Fed.  Silver is up 5¢ on the day at $14.19.

* Bloomberg: Powell says solid economy faces headwinds as Fed mulls rates

Quote of the Day
“This is a terrible fiscal situation we’ve got ourselves into. The administration is doing tax cuts and a spending decrease, but he’s doing them in the wrong order. What we need right now is to focus totally on reducing the debt. We’re in a stage where if nothing is changed, we’re about to go from stagnation to stagflation, with a significant rise in inflation and a wholly significant imbalance in the economy, which is very difficult to anticipate at this stage. But the outlook is not exactly terrific.” – Alan Greenspan, 12/2017, CNBC interview

Chart of the Day

Chart note: The St. Louis Federal Reserve recently released this new chart on tax receipts. It shows corporate tax receipts plummeting and taxes on production and imports rising. This might be a new set of circumstances brought about by the Trump administration’s tax cuts and tariff programs. In the aggregate, tax receipts represented by the thick black line are falling at a time when government debt is expected to increase – and by some accounts increase significantly. For a prescient observation as to what all of this might lead to, we refer you to the quote from Mr. Greenspan immediately above.

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

Warren Buffett would buy precious metals again, if he could

Investing.com/Jesse Felder/11-14-2018

“‘But it’s also important to look at his later thesis for buying silver: ‘In recent years, bullion inventories have fallen materially, and last summer Charlie and I concluded that a higher price would be needed to establish equilibrium between supply and demand.’ Currently, we have a very similar situation in gold.”

USAGOLD note:  In this interesting retrospective, Jesse Felder applies Munger-Buffet logic from two decades ago  to the present situation and concludes its a good time to buy gold. . . .

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Posted in Today's top gold news and opinion |

Gold on the fence as global tangle dominates trading

DAILY MARKET REPORT

Gold continues to ping-pong on either side of the $1200 mark unable to make a convincing move up or down. It, in fact, is right at $1200 as we write this report and down $3.50 on the day. Silver similarly is stuck in and around the $14 mark and down marginally on the day.

The precious metals are experiencing headwinds from weakness in both the yuan and euro in recent days.  The situation in Europe – most notably having to do with Brexit and the budget situation in Italy – does not lend itself to quick or easy resolution.  With respect to China, there have been rumblings of lower interest rates and a weakening economy.  That prognosis is balanced in the United States against the prospect of rising inflationary expectations and concerns about stability in financial markets.

“Demand for copper shall be positive next year and in the coming years,” Marcin Chludziński, head of copper mining giant KGHM Polska Miedz SA, told Bloomberg yesterday. “The trade conflict may affect demand to some extent,” he concludes, “but on the other hand China is changing its growth model and starting to accelerate internal consumption in order to rely less on exports and more on its domestic market.”

In an odd break with standard operating procedure, ex-Fed chair Janet Yellen voiced her concerns about the dollar being too strong – a prospect she feels could widen the U.S. trade gap. It seems that much is up in the air at the moment on the global stage and gold is content to remain on the fence as a result – at least for now. That, as always though, is subject to change without notice. . . . . . . .

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 Crashes – Anatomy of a Typical Financial Crisis (2001)

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 on the fence as global tangle dominates trading

DAILY MARKET REPORT

Gold continues to ping-pong on either side of the $1200 mark unable to make a convincing move up or down.  It, in fact, is right at $1200 as we write this report and down $3.50 on the day.  Silver similarly is stuck in and around the $14 mark and down marginally on the day.

The precious metals are experiencing headwinds from weakness in both the yuan and euro in recent days.  The situation in Europe – most notably having to do with Brexit and the budget situation in Italy – does not lend itself to quick or easy resolution.  With respect to China, there have been rumblings of lower interest rates and a weakening economy.  That prognosis is balanced in the United States against the prospect of rising inflationary expectations and concerns about stability in financial markets.

In an odd break with standard operating procedure, ex-Fed chair Janet Yellen voiced her concerns about the dollar being too strong – a prospect she feels could widen the U.S. trade gap.  It seems that much is up in the air at the moment on the global stage and gold is content to remain on the fence as a result – at least for now. That, as always though, is subject to change without notice. . . . . . . .

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 Crashes – Anatomy of a Typical Financial Crisis (2001)

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