Author Archives: News

Theresa May’s Brexit plan falls by 230 votes

Financial Times/George Parker, Laura Hughes and Michael Peel/1-15-2019

“Mrs May’s crushing loss by 230 votes, the biggest defeat inflicted on any government, sees the prime minister in a race against time to revamp and resuscitate her deal before Britain’s scheduled departure from the EU on March 29. Some 118 out of 317 Conservative MPs voted against the deal and Jeremy Corbyn, Labour leader, immediately tabled a vote of no confidence in the government. He said the defeat of the deal had been ‘absolutely decisive’.”

USAGOLD note:  It is difficult to know where we go from here. . . .There may be some fireworks overnight but, as of this posting, the markets are relatively quiet.  The important reaction will be the one that comes from Europe and the UK itself.

Share
Posted in Today's top gold news and opinion |

The world’s biggest economies are moving deeper into a slowdown

Bloomberg/William Horobin/1-14-2019

“Momentum is easing across the world’s major economies, according to a gauge that the Organization for Economic Co-Operation and Development uses to predict turning points. The Composite Leading Indicator is the latest sign of a synchronized slowdown in global growth, adding to recession warnings sparked by industrial figures in Germany last week and slumping trade figures for China earlier on Monday.”

USAGOLD note:  Does it seem to you that the situation has gone from good to bad almost overnight?  If so, you are not alone. . . . . . .With headlines like the one above becoming more commonplace, the “patient and flexible” comment from Fed chair Powell last week begins to make more sense.

Share
Posted in Today's top gold news and opinion |

The $4.5 trillion force that’s helping to fuel market swings

CNN/Matt Egan/1-10-2019

“Still, it’s sensible policy for the Fed to try to shrink its holdings. Historically low rates and a huge balance sheet give the central bank limited ammo to fight the next recession, which investors increasingly fear is around the corner.  The market’s sensitivity to the Fed’s balance sheet is a fresh reminder that this is all a grand experiment. No one really knows how it will turn out.”

USAGOLD note:  All of which elevates the importance of gold as a safe-haven hedge against the unknown – a consideration driving much of the demand for physical gold globally these days.

 

Share
Posted in Today's top gold news and opinion |

Weakest Treasuries demand since 2008 send bond-market warning

Bloomberg/Katherine Greifeld

“As the U.S. government kicks off its debt sales this year, here’s one potentially worrisome sign for traders to keep in mind: the steep decline in demand at its bond auctions.”

USAGOLD note:  It is a lingering concern in the bond market that, as U.S. government needs elevate, the supply will exceed demand.  We have reported here in the past of China and Japan’s withdrawal from the market as buyers.  In the absence of new buyers, the responsibility for financing the U.S. sovereign debt will likely fall principally on American buyers.  It is difficult to know now what happens if the “steep decline” in buyers’ interest continues and/or deepens.  The chart below details the additions to the U.S. quarterly year over year.  As you can see, as of the third quarter of last year, the numbers, though climbing, had not reached levels comparable to the 2008 financial crisis.  What preoccupies bond traders is what happens if/when they do?

Repost from 1/10/2019

Share
Posted in Today's top gold news and opinion |

The White House reportedly asked the Pentagon for military plans to strike Iran

CNBC/Natasha Turk/1-13-2019

“The request, reportedly made the National Security Council which is led by national security advisor John Bolton, alarmed Pentagon and State Department officials, the [Wall Street] Journal wrote on Sunday. The Council made the move after an Iranian-aligned group fired missiles into Baghdad’s diplomatic quarter, which hosts the U.S. embassy in Iraq. No one was harmed.”

USAGOLD note:  It is not probably necessary to alert our readers as to the potential ramifications of a strike on Iran beginning with the impact on the oil market. . . . . .That said there are a number of qualifiers in this story beginning with the fact that the request came last September and extending through a disclosure that the the newspaper did not know if the president was the source of the request.

Share
Posted in Today's top gold news and opinion |

Russia buys quarter of world’s yuan reserves in shift from dollar

Bloomberg/Natasha Doff and Anna Andrianova/1-9-2019

“Russia’s central bank dumped $101 billion in U.S. holdings from its huge reserves, shifting into euros and yuan last spring amid a new round of U.S. sanctions. The central bank moved the equivalent of $44 billion each into the European and Chinese currencies in the second quarter, according to a report published on late Wednesday by the Bank of Russia, which discloses the data with a six-month lag. Another $21 billion was invested in the Japanese yen.”

USAGOLD note:   We should not forget that Russian, the third largest gold miner in the world, is channeling its gold production into central bank reserves as well.  “We aren’t ditching the dollar,” Bloomberg quotes Russian President Vladimir Putin. “The dollar is ditching us.”

Share
Posted in Today's top gold news and opinion |

Fed Chairman Powell says he is ‘very worried’ about growing amount of U.S. debt

CNBC/Thomas Franck/1-10-2019

“‘I’m very worried about it,’ Powell said at The Economic Club of Washington, D.C. ‘From the Fed’s standpoint, we’re really looking at a business cycle length: that’s our frame of reference. The long-run fiscal, nonsustainability of the U.S. federal government isn’t really something that plays into the medium term that is relevant for our policy decisions. ‘However, ‘it’s a long-run issue that we definitely need to face, and ultimately, will have no choice but to face,’ he added.”

USAGOLD note:  The forgotten crisis. . . .

–––––––––––––––––––––––––––––––––––––––––––

The National Debt and Gold
Here’s why the two have risen together since the 1970s
and why the correlation is likely to continue

[LINK]

“It is a fact that when your national debt gets to the level ours is, that it constitutes an economic threat to the society, and that kind of threat ultimately has a national security consequence for it.” – John Bolton, U.S. National Security Adviser to President Trump

“Last month, as the US midterm elections approached, Deutsche Bank analysts released a calculation that should have made American voters wince. It shows that the US government currently pays $1.43bn each day (yes, day) to service its public debt — 10 times more than any other G7 country (Italy is a distant second in this grim league).” – Gillian Tett, Financial Times

–––––––––––––––––––––––––––––––––––––––––––

 

Share
Posted in Today's top gold news and opinion |

Germany repatriates about half of its gold reserves

But with Europe stumbling from crisis to crisis, the German public has grown uneasy about keeping the gold abroad. Some even argue the world’s second biggest bullion reserve may be needed to back a new deutschmark, should the euro zone break up.” – Reuters, 2-9-2017

“Germany has a stronger relationship with gold than most nations. The country’s experience with hyperinflation between 1919 and 1923, during the years of the Weimar Republic, is ingrained in the national consciousness. Gold, above all, stands for stability” – Financial Times, 11-10-2017

Germany this year (2017) completed its scheduled transfer of national gold reserves from the New York Fed and the Bank of France.  Germany will now leave 1236 tonnes at the New York Fed and another 432 tonnes in London.  The remainder of its 3378 tonne national holding will be stored in Frankfurt.  The repatriation transfers to Frankfurt were completed three years ahead of schedule.

With respect to the gold left at the Fed, Bundesbank’s Carl-Ludwig Thiele told reporters: “We have a lot of discussions about (U.S. President Donald) Trump, regarding implications on monetary policy, macroeconomics, etc., but we trust the central bank of the U.S.”

Thiele’s confidence in the Federal Reserve, brings to mind an old story about Germany’s relationship with the Federal Reserve and the storage of its gold reserves. When Hjalmar Schacht, head of Germany’s central bank in the 1920s, visited the New York Fed he asked to see Germany’s gold stored in its vaults.

“Strong**,” wrote Schacht in a 1955 autobiography, “was proud to be able to show us the vaults which were situated in the deepest cellar of the building and remarked: ‘Now, Herr Schacht, you shall see where the Reichsbank gold is kept.’ ” Storage staff went off to retrieve the gold.  “At length,” Schacht goes on, “we were told: ‘Mr. Strong, we can’t find the Reichsbank gold.’ ”  To which Schacht replied: “Never mind; I believe you when you say the gold is there. Even if it weren’t you are good for its replacement.”One need presume that nearly 100 years later, the level of trust conveyed by Schacht remains in place.

It is unlikely that Germany would depart the euro anytime soon and back a new Deutschmark with gold.  Having an asset set aside, though, that is detached from erratic national currencies in this day and age is a wise move for the prudent nation state – just as it is for prudent the private investor.

–– USAGOLD


** New York Fed president at the time, Benjamin Strong

Repost from 2/10/2017, updated October, 2018. The Financial Times article linked at the top of the page tells the fascinating inside story of Germany’s gold repatriation.

Share
Posted in MK, RepostKeepers, Today's top gold news and opinion |

When even US Treasuries are no longer safe havens, market volatility is here to stay

South China Morning Post/Benjamin J. Cohen/1-9-2019

“With equities slumping, exchange-rate volatility increasing and political risks intensifying, financial markets around the world have hit a rough patch. In times like these, international investors generally grow cautious and prioritise safety over returns, so money flees to safe havens that provide secure, liquid investment-grade assets on a sufficiently large scale. But there are no obvious safe havens today. For the first time in living memory, investors lack a quiet port where they can take shelter from a storm.

USAGOLD note:  We would recommend that Mr. Cohen sign-up for our new Introductory Information Packet. (See sign-up in sidebar right)  In it we detail the reasons why gold just might be the “quiet port” he is searching for and how he can go about becoming an owner.

Share
Posted in Today's top gold news and opinion |

Fitch sends U.S. triple-A rating warning

Reuters/1-9-2019

“‘If this shutdown continues to March 1 and the debt ceiling becomes a problem several months later, we may need to start thinking about the policy framework, the inability to pass a budget… and whether all of that is consistent with triple-A,’ Fitch’s global head of sovereign ratings James McCormack said on Wednesday in London.”

USAGOLD note:  When Standard & Poor’s lowered its credit rating of the United States from AAA to AA+ on August 5, 2011, it set off a strong rally in the gold price.  On August 4, the price stood at $1662.  Within four days it was trading at over $1800.  By August 21st it had hit its all-time highs of over $1900 per ounce.

Share
Posted in Today's top gold news and opinion |

Huge cosmic explosions that produce platinum, silver and gold may be more common than previously thought

Newsweek/Aristos Georgiou

“‘A kilonova is a flash of light produced by the radioactive debris of a neutron star collision,’ Troja said. ‘During the collision a lot of neutron-rich stuff is spewed into space at a velocity that is 20-30 percent the speed of light. In these extreme conditions something very special happens: neutron star matter turns into gold, silver, platinum, uranium… all the metals heavier than iron are forged in these cosmic collisions.'”

USAGOLD note:  I would not be surprised to see the Wall Street anti-gold crowd use this discovery as a justification to short gold on the COMEX [smile].


NASA image, Spitzer Space Telescope Cassiopeia A – supernova remnant, public domain/WikiMedia Commons


Repost from 10-18-2018

Share
Posted in Today's top gold news and opinion |

The shady origins of gold refined in Switzerland

SwissInfo.ch/Riccardo Franciolli/1-8-2019

“Most of the gold in the world passes through Switzerland. This is a business worth CHF70-90 billion ($70-90 billion) depending on the year. Gold arrives here in unrefined form, and leaves the country in all its glittering purity. Sometimes, though, it is of highly dubious provenance. The government recognises the risk, which is why it recently issued a report on the subject. This report raises concerns over the exploitation of mine workers, and makes several recommendations to Swiss firms active in the field.”

USAGOLD note:  An interesting inside look at Switzerland’s flourishing gold bullion business.

Share
Posted in Today's top gold news and opinion |

$1 trillion fleeing London because of Brexit

Bloomberg/Silla Brush/1-7-2019

“Banks, insurers and money managers are planning to move about 800 billion pounds ($1 trillion) of assets from the U.K. to the rest of Europe as Brexit uncertainty takes its toll, according to a survey conducted by EY.”

USAGOLD note: $1 trillion is not small potatoes.  The City of London will take a hit, but other money centers will be major beneficiaries.  With London also being the global center for global trade, one has to wonder how the gold market will be affected.

Share
Posted in Today's top gold news and opinion |

Former Fed Chairman Paul Volcker thinks ‘we’re in a hell of a mess’

CNBC/Jeff Cox/10-23-2018

“When Volcker looks around now, he sees ‘a hell of a mess in every direction,’ including a lack of basic respect for government institutions, a current Fed that seems to be following a completely arbitrary benchmark and a ‘swamp’ in Washington run by plutocrats.”

USAGOLD note:  Volcker has always been known for speaking his mind plainly and usually with deep insight.  In that single sentence, though, he seems to have outdone himself. . . .and pretty much summed things up.


Image by European People’s Party (EPP Congress Bonn) [CC BY 2.0 (https://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons [Edited]

Repost from 10-24-2018

Share
Posted in Today's top gold news and opinion |

The super rich of silicon valley have a doomsday plan

Bloomberg/Olivia Carville

“Years of doomsday talk at Silicon Valley dinner parties has turned to action. In recent months, two 150-ton survival bunkers journeyed by land and sea from a Texas warehouse to the shores of New Zealand, where they’re buried 11 feet underground. Seven Silicon Valley entrepreneurs have purchased bunkers from Rising S Co. and planted them in New Zealand in the past two years, said Gary Lynch, the manufacturer’s general manager. At the first sign of an apocalypse — nuclear war, a killer germ, a French Revolution-style uprising targeting the 1 percent — the Californians plan to hop on a private jet and hunker down, he said.”

USAGOLD note:  We bring attention to this article to show the level of concern about economic, social and political instability among very rich, self-made, independently-minded entrepreneurs.  The placidity of the moment can give way to chaos in a heartbeat as anyone who has studied history – or lived through a Venezuela-type moment – will attest.  The odds of society having to deal with a breakdown at this level are slim, as these occurrences are rare.  It is the many levels of danger short of the ultimate unraveling that truly need to be hedged, bridged, survived.  Anyone who has thought their way through the problem will find their way to gold – the most effective and practical insurance policy against the dangers outlined in this article and the one that buys time. . . .that most valuable of commodities.


Repost from 9-5-2018

Share
Posted in Today's top gold news and opinion |

Yen flash crash: What happened and why

Financial Times/Eva Szalay/1-3-2019

“With 2019 barely begun, investors and traders in the $5.1tn-a-day foreign exchange market are trying to decipher a sudden and violent move in a series of currencies that unfolded early on Thursday in Asian trading.”

USAGOLD note:  FT goes on to run through a list of possible causes, rejects them, then settles on “algorithmic” origins coupled with the “depletion of human trading experience.”  Why is it that this sounds like a refrain and basic analysis we are going to hear repeated increasingly in the weeks and months ahead? As we have mentioned on several occasions in the past, hedging the potential for software to go awry is as powerful an argument for gold ownership as the myriad of others we have brought to your attention over the years.

Share
Posted in Today's top gold news and opinion |

Gold barrels into 2019 as growth concerns spur demand for haven

Bloomberg/Jake Lloyd-Smith and Krystal Chian/12-30-2018

“‘For gold prices, I think there is upside to be seen in 2019,’ Jingyi Pan, market strategist at IG Asia Pte., told Bloomberg TV on Monday, citing prospects for fewer tightening moves from the U.S. central bank. ‘It does look like one where we will see a slackening of expectations in Fed hikes.’”

USAGOLD note:  What has been odd about this year’s annual turn of the year predictions’ blitz is the absence of negative analysis – hardly a negative word heard from either Wall Street  or the gold space.

Repost from 1/2/2019

Share
Posted in Today's top gold news and opinion |

Yen’s best new year in a decade shifts playing field in Japan

Bloomberg/Masaki Kondo/1-3-2019

“The yen has surged 2.5 percent against the dollar from the close of trading on Dec. 28 to 5 p.m. in Tokyo on Thursday, set for the biggest advance during any Japanese new-year-holiday break since 2008, data compiled by Bloomberg show.”

USAGOLD note:  As shown in the charts below, sharp increases in the value of the yen against the U.S. dollar in recent years have been accompanied by equally sharp increases in the dollar price of gold. The two are seen among global traders as safe-haven plays.

 

Share
Posted in Today's top gold news and opinion |

Tabakovic: NBS buying gold, has over 20 t in reserve

Tanjug Exactly/12-31-2018

“When asked if she would listen to the advice of Serbian President Aleksandar Vucic, who has suggested the NBS should be buying gold, ]National Bank of Serbia Governor Jorgovanka Tabakovic] responded: ‘Of course’, adding that the NBS was already doing so and that security was important.”

USAGOLD note:  Serbia adds its name to the growing list of central banks/nation states purchasing gold for safe-haven purposes.  Vucic is concerned about a “new economic crisis breaking out at the end of 2019 or in 2020.”

Share
Posted in Today's top gold news and opinion |

2018 ends in a sea of red. . . . .

Amidst a sea of red for 2018, stock market volatility comes out the clear winner in what many will see as appropriate for a year that will be remembered as one that most would like to forget. Bitcoin came out at the bottom of the list – down 43.65%. Gold, in a victory of sorts, finished down only 4.21% on the year.  Silver by contrast was down 11.82% and the Dow Jones Industrial Average was down 6.53%.

52-Week Futures Performance Leaders
Courtesy of barchart.com

Share
Posted in Today's top gold news and opinion |

National debt under Trump is surging at its fastest pace since 2012

Bloomberg/Alexandre Tanzi/12-12-2018

“If this year’s growth rate is sustained through the end of the year, it would be the biggest jump in percentage terms since the last year of President Barack Obama’s first term, at a time when the economy needed fiscal stimulus in the aftermath of the financial crisis. As of Monday, the nation’s debt stood at a record $21.9 trillion.”

USAGOLD note:  For many years, Americans  erroneously were led to believe that the national debt did not matter because we owed it to ourselves.  That all changed when analysts began to point out that the growing expenditure for interest on the national debt necessarily was coming out of tax revenues.  In short, the debt matters because the interest rate payments matter – now nearly the equivalent of what the nation spends on national defense, i.e., $610 billion in 2017 (compared to $521 billion paid in interest). Needless to say two factors will impact that number in 2019 – first, the rapid growth in additions to the aggregate national debt and the rising overall interest rate paid on the total.  Note the spike in interest payments in the chart below for 2017.  The 2018 number is yet to be posted at the St. Louis Federal Reserve.


Repost from12/13/2018

Share
Posted in Today's top gold news and opinion |

Oil jumps 9% in surprise rebound after Christmas Eve rout

Investing.com/12-26-2018

“Has New Year salvation for oil come early? U.S. West Texas Intermediate crude rebounded forcefully on Wednesday as markets reopened from the Christmas holiday, surging 9% to recoup all of what it lost just before the break and more.”

USAGOLD note:  Odd that oil would jump so tellingly on the same day as stocks and near the end of the year.  It raises the prospect of short-covering – perhaps for both markets.

Share
Posted in Today's top gold news and opinion |

Global chaos makes gold a holiday winner for hedge funds

Bloomberg/Joe Deaux/12-21-2018

“Forget frankincense or myrrh — chaos in global markets makes gold the holiday asset hedge funds are getting behind. . . . As financial anxieties heighten, investors have poured about $1.56 billion into exchange-traded funds backing precious metals over the past month, the biggest inflows among commodity ETFs. Open interest for gold futures is also on the rise.”

USAGOLD note:  Gold ETF holdings have been on the rise for quite some time as hedge funds move out of stocks and bonds and into other investments. There is a massive amount of capital liquidity on the books of funds and institutions looking for a home. Increasingly, it looks like gold and the rest of the commodities complex will be a destination for at least portion of it.  What analysts sometimes overlook is how paltry the supply of physical gold in the face of building cash tsunami.

Share
Posted in Today's top gold news and opinion |

‘The worst is yet to come’: Experts say a global bear market is just getting started

CNBC/Yen Nee Lee/12-25-2018

“Bear markets — typically defined as 20 percent or more off a recent peak — are threatening investors worldwide. In the U.S., the Nasdaq Composite closed in a bear market on Friday and the S&P 500 entered one on Monday. Globally, Germany’s DAX, China’s Shanghai Composite and Japan’s Nikkei have also entered bear market levels.”

USAGOLD note:  Not what stock investors will want to hear as we wind up 2018 and head into the new year. The Christmas Eve 650-point plunge will likely be remembered as emblematic of the worst December stock market since the Great Depression – and, as you can see from below, the disaster was not confined to the United States alone, but a global event.

Charts courtesy of TradingEconomics.com

Share
Posted in Today's top gold news and opinion |

Swiss gold exports to Asia climb further in November

Scrap Register/12-21-2018

“‘Gold exports to India nearly tripled month-on-month, while exports to China and Hong Kong soared by just shy of 60%,’ [Commerzbank] added.”

USAGOLD note:  China’s general economy might have slowed in recent months, but its appetite for gold has not.

Share
Posted in Today's top gold news and opinion |

Dollar set for biggest weekly drop in 10 months

Reuters/Saikat Chatterjee/12-21-2018

“The dollar consolidated overnight losses on Friday and is set for its biggest weekly drop in 10 months as the threat of a U.S. government shutdown and lower bond yields on the back of concerns of slowing economic growth weigh.”

USAGOLD note:  Quietly, while all eyes have been on global stock markets, the value of the dollar has been falling against its major competitors.

Share
Posted in Today's top gold news and opinion |

The big story overnight was the dollar and gold

Charts courtesy of TradingEconomics.com

Share
Posted in Today's top gold news and opinion |

Gold ETF holdings hit the highest level since July

Scrap Register/12-20-2018

“U.S. President Donald Trump again ‘trashed convention’ and urged the Fed to not hike rates, SP Angel continues. ‘Global [ETF] assets expanded more than 10 tons to the highest since July, with investors seeking havens as equities founder, and expectations of hikes in 2019 recede,’ SP Angel added. ‘Gold snapped a six-month losing run in October, held its ground in November, and then gained this month as investors position themselves for 2019 by adding to worldwide holdings in ETFs,’ noted.”

USAGOLD note:  Among funds and institutions, the safe-haven trade in gold manifests itself – the other side of the interest rate coin.

Share
Posted in Today's top gold news and opinion |

The year in money

Bloomberg/12-19-2018

“Trade disputes, exploding global debt and volatile stock markets were just the beginning. Here are the numbers behind the defining moments for global markets and economies in 2018.

USAGOLD note:  An interesting retrospective from Bloomberg on trends and events from this past year.  Some things you knew, other you probably didn’t. . . . . . . .

Share
Posted in Today's top gold news and opinion |

Chinese treasury holdings tumble to lowest since May 2017

BloombergQuint/Andrew Mayeda and Katherine Greifeld/12-18-2018

“China’s holdings of notes, bills and bonds dropped for a fifth straight month to $1.14 trillion in October, from $1.15 trillion in September, according to data from the Treasury Department released on Monday. That’s the lowest level since May 2017. China remains the biggest foreign creditor, followed by Japan, whose holdings slipped by $9.5 billion to $1.02 trillion.”

USAGOLD note:  Bloomberg reports the latest installment in a process that has been in motion for quite some time.  China’s holdings are down over 4% on the year; Japan’s are down just under 7% – an eye-opener.

Share
Posted in Today's top gold news and opinion |