Author Archives: USAGOLD

Gold warms; its third day on the plus side

Gold is warming a bit as we head into the second half of summer having spent the past three days in positive territory, though modestly so. The yellow metal is trading in the $1216 range – up $2.50 on the day. Silver is up 7¢ at $15.49. It is still too early to call the positive pricing in recent days a turnaround, but at least we can say the metals are steady at current prices, even if the support seems somewhat tenuous. In a bit of a surprise given widespread anecdotal reports of price increases from various manufacturers and wholesalers over the past couple of weeks, producer prices came in unchanged this morning. Some among the financial commentariat will see the timid showing as supporting the secular stagnation argument and cause for the Fed to go easy on its interest rate plans. Others will see it simply as the lag between the reporting framework and reality. That, in a small way, might be adding to gold’s performance thus far today.

Quote of the Day
“One thing that might even be most disturbing of all, is that no real crisis ever ultimately expresses itself, which actually, oddly enough, may be the worst outcome of all. That is to say, everything we see about our world today, the rich getting richer, the poor getting poorer, democracy sort of ebbing away, people feeling powerless over their political lives, people feeling less and less a sense of civic participation or belonging, and we have kind of turned that up. There is an interesting book by Tyler Cohen. He is a very popular writer now, he wrote Average is Over and The Great Stagnation. He wrote a recent book called The Complacent Class. If you want to read a book about America’s future in the absence of a fourth turning, read that book. The real rate of return gets lower and lower, we kind of approach the stationary state, productivity growth kind of ebbs to nothing, we become a kind of nominal market society, but one in which all the markets are dominated by a few very large companies with enormous market power and concentration. In that kind of society, highly stratified, not feeling at all like what we think of as being America, is, I think, the scariest one, one in which global problems, problems of global order are not rectified. And it is one that disturbs me the most.” – Neil Howe, McAlvany Weekly Commentary, 7/7/2017

Chart of the Day

Chart note: During that 18-year period from 2000 to present, the one-year Treasury provided a positive real rate of return in only six years. The rest of the time, the real rate of return was negative. The real rate of return is also important in the context of Federal Reserve interest rate policy in that it signals the performance of the dollar against other currencies and gold. At the moment, the consensus opinion is that the Fed will keep interest rates below the inflation rate in order to keep the economy from swinging into a downturn, a situation causing some analysts to question the longer-term staying power of the recent rally in the dollar.

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DMR–Gold warms; its third day on the plus side

DAILY MARKET REPORT

Gold is warming a bit as we head into the second half of summer having spent the past three days in positive territory, though modestly so.  The yellow metal is trading in the $1216  range – up $2.50 on the day. Silver is up 7¢ at $15.49.  It is still too early to call the positive pricing in recent days a turnaround, but at least we can say the metals are steady at current prices, even if the support seems somewhat tenuous.  In a bit of a surprise given widespread anecdotal reports of price increases from various manufacturers and wholesalers over the past couple of weeks, producer prices came in unchanged this morning.  Some among the financial commentariat will see the timid showing as supporting the secular stagnation argument and cause for the Fed to go easy on its interest rate plans.  Others will see it simply as the lag between the reporting framework and reality.  That, in a small way, might be adding to gold’s performance thus far today.

Quote of the Day
“One thing that might even be most disturbing of all, is that no real crisis ever ultimately expresses itself, which actually, oddly enough, may be the worst outcome of all. That is to say, everything we see about our world today, the rich getting richer, the poor getting poorer, democracy sort of ebbing away, people feeling powerless over their political lives, people feeling less and less a sense of civic participation or belonging, and we have kind of turned that up. There is an interesting book by Tyler Cohen. He is a very popular writer now, he wrote Average is Over and The Great Stagnation. He wrote a recent book called The Complacent Class. If you want to read a book about America’s future in the absence of a fourth turning, read that book. The real rate of return gets lower and lower, we kind of approach the stationary state, productivity growth kind of ebbs to nothing, we become a kind of nominal market society, but one in which all the markets are dominated by a few very large companies with enormous market power and concentration. In that kind of society, highly stratified, not feeling at all like what we think of as being America, is, I think, the scariest one, one in which global problems, problems of global order are not rectified. And it is one that disturbs me the most.” – Neil Howe, McAlvany Weekly Commentary, 7/7/2017

Chart of the Day

Chart note: During that 18-year period from 2000 to present, the one-year Treasury provided a positive real rate of return in only six years.  The rest of the time, the real rate of return was negative.  The real rate of return is also important in the context of Federal Reserve interest rate policy in that it signals the performance of the dollar against other currencies and gold.  At the moment, the consensus opinion is that the Fed will keep interest rates below the inflation rate in order to keep the economy from swinging into a downturn, a situation causing some analysts to question the longer-term staying power of the recent rally in the dollar.

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

Gold stages strong recovery in overnight markets, China yuan policy and Iran sanctions major influences

Gold staged a strong recovery overnight bouncing off lows at $1207 to trade as high as $1216 in overnight markets. It has since backed off a bit in early New York trading – now at $1213.50 on the day and up $4.50. Silver is also up trading at $15. Gold is supported by two ongoing influences this morning – China’s reinforcing of intentions to stabilize the yuan and the America’s imposition of sanctions on Iran. The first sends a signal to speculators to tread carefully shorting the yuan. The second drives home the reality of oil supply disruptions and the heightening of tensions throughout the Middle East.

Quote of the Day
“It doesn’t matter where the crisis begins. Once the tsunami hits, no one will be spared. The stock market is going to correct in the face of rising credit losses and tightening credit conditions. No one knows exactly when it’ll happen, but the time to prepare is now. Once the market corrects, it’ll be too late to act. That’s why the time to buy gold is now, while it’s cheap. When you need it most, once the crisis hits, it’ll cost a fortune.” – James Rickards, Daily Reckoning

Chart of the Day

Chart note: This chart illustrates Rickards’ point made in our Quote of the Day about the escalating cost of gold during crisis periods. During the 1970s, an inflationary crisis moved prices radically higher with 1980 registering the greatest increase right at double the previous year. The disinflationary crisis of the 2000s also instigated significant year over year increases with 2006 posting the largest at nearly 36%. For those who understand the inevitability of business and economic cycles, the time to buy gold is when everything is quiet – in times like the present.

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Posted in dailyquotes |

DMR–Gold stages strong recovery in overnight markets, China yuan policy and Iran sanctions major influences

DAILY MARKET REPORT

Gold staged a strong recovery overnight bouncing off lows at $1207 to trade as high as $1216 in overnight markets. It has since backed off a bit in early New York trading – now at $1213.50 on the day and up $4.50. Silver is also up trading at $15.  Gold is supported by two ongoing influences this morning – China’s reinforcing of intentions to stabilize the yuan and the America’s imposition of sanctions on Iran.  The first sends a signal to speculators to tread carefully shorting the yuan.  The second drives home the reality of oil supply disruptions and the heightening of tensions throughout the Middle East.

Quote of the Day
“It doesn’t matter where the crisis begins. Once the tsunami hits, no one will be spared. The stock market is going to correct in the face of rising credit losses and tightening credit conditions. No one knows exactly when it’ll happen, but the time to prepare is now. Once the market corrects, it’ll be too late to act. That’s why the time to buy gold is now, while it’s cheap. When you need it most, once the crisis hits, it’ll cost a fortune.” – James Rickards, Daily Reckoning

Chart of the Day

Chart note:  This chart illustrates Rickards’ point made in our Quote of the Day about the escalating cost of gold during crisis periods.  During the 1970s, an inflationary crisis moved prices radically higher with 1980 registering the greatest increase right at double the previous year. The disinflationary crisis of the 2000s also instigated significant year over year increases with 2006 posting the largest at nearly 36%.  For those who understand the inevitability of business and economic cycles, the time to buy gold is when everything is quiet – in times like the present.

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

Gold tumbles in Asia, Europe; stages minor recovery in U.S.

Gold took a bit of a tumble in Asian and European markets overnight trading at one point just below $1208 before staging a minor recovery. It is now trading at the $1211.50 level in U.S. markets – down $2.00 on the day – as China’s yuan and Japan’s yen stubbornly track lower. Currency traders, at this juncture, seem poised to test China’s support of the yuan signaled late last week. Silver is down 5¢ this morning at $15.33. The markets in general seem to be off to a tenuous start for the week with stocks on the downside and bond yields steady ahead of a heavy issue of Treasuries through mid-week and inflation numbers on Thursday and Friday.

Quote of the Day
“Meanwhile, China instability and trade fears see EM markets take another leg lower, with particular market concern for the highly levered Asian economies. De-risking/de-leveraging dynamics attain self-reinforcing momentum, as contagion effects engulf the global ‘periphery.’ Fears of global financial fragility and economic vulnerability see risk aversion begin to gravitate toward the ‘core.’ Fears of EM central bank and Chinese selling of U.S. Treasuries overwhelm safe haven buying, as de-risking/de-leveraging dynamics see a widening of Credit spreads and illiquidity begin to impact ‘core’ fixed-income markets. In such a problematic global scenario, I ponder whether Beijing might perceive it’s playing with a relatively stronger hand than their U.S. adversary. Meanwhile, contagion effects would set their sights on the ‘periphery of the core.’ This just doesn’t seem all that far-fetched.” – Doug Noland, Credit Bubble Bulletin

Chart of the Day

Chart courtesy of TradingEconomics.com

Chart note: If you follow the on-going trade war between the United States and China with even passing interest, you have no doubt come across references to China selling U.S. Treasuries as its ultimate hole card. This chart shows something that few, including many financial journalists, acknowledge: China has been unloading exchange reserves since 2014 when they peaked at nearly $4 trillion. Most of those reductions, which have taken China’s reserves to a little over $3 trillion (a 25% reduction) came as part of its policy to smooth the yuan exchange rate against the dollar and prevent wholesale capital flight. It is unclear at this juncture to what extent China would be willing to drain reserves in defense of the yuan in the future. Trading Economics, as the chart shows, projects further reserve reductions in the future.

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Posted in dailyquotes |

DMR–Gold tumbles in Asia, Europe; stages minor recovery in U.S.

DAILY MARKET REPORT

Gold took a bit of a tumble in Asian and European markets overnight trading at one point just below $1208 before staging a minor recovery. It is now trading at the $1211.50 level in U.S. markets – down $2.00 on the day – as China’s yuan and Japan’s yen stubbornly track lower.  Currency traders, at this juncture, seem poised to test China’s support of the yuan signaled late last week.  Silver is down 5¢ this morning at $15.33.  The markets in general seem to be off to a tenuous start for the week with stocks on the downside and bond yields steady ahead of a heavy issue of Treasuries through mid-week and inflation numbers on Thursday and Friday.

Quote of the Day
“Meanwhile, China instability and trade fears see EM markets take another leg lower, with particular market concern for the highly levered Asian economies. De-risking/de-leveraging dynamics attain self-reinforcing momentum, as contagion effects engulf the global ‘periphery.’ Fears of global financial fragility and economic vulnerability see risk aversion begin to gravitate toward the ‘core.’ Fears of EM central bank and Chinese selling of U.S. Treasuries overwhelm safe haven buying, as de-risking/de-leveraging dynamics see a widening of Credit spreads and illiquidity begin to impact ‘core’ fixed-income markets. In such a problematic global scenario, I ponder whether Beijing might perceive it’s playing with a relatively stronger hand than their U.S. adversary. Meanwhile, contagion effects would set their sights on the ‘periphery of the core.’ This just doesn’t seem all that far-fetched.” – Doug Noland, Credit Bubble Bulletin

Chart of the Day

Chart courtesy of TradingEconomics.com

Chart note: If you follow the on-going trade war between the United States and China with even passing interest, you have no doubt come across references to China selling U.S. Treasuries as its ultimate hole card.  This chart shows something that few, including many financial journalists, acknowledge:  China has been unloading exchange reserves since 2014 when they peaked at nearly $4 trillion.  Most of those reductions, which have taken China’s reserves to a little over $3 trillion (a 25% reduction) came as part of its policy to smooth the yuan exchange rate against the dollar and prevent wholesale capital flight. It is unclear at this juncture to what extent China would be willing to drain reserves in defense of the yuan in the future. Trading Economics, as the chart shows, projects further reserve reductions in the future.

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

Gold feels the stirrings of a breeze ‘midst the summer doldrums

Gold, lately becalmed in the annual summer doldrums, felt the first stirrings of a breeze this morning – rising nearly $11 to trade at the $1219 level. Silver was similarly disposed trading 22¢ higher at $15.54. Two factors of interest converged to put a breeze in gold’s sails – a less than gratifying jobs report and word that China had intervened “to cushion the yuan, ” as Bloomberg tells it. The Japanese yen, as has been its practice of late, quickly followed the yuan higher.

For those just learning about gold, we will repeat something we have written about often here. It is not sufficient to simply report that gold is down because the dollar is up, as much of the mainstream financial media is wont to do.

Instead, we should be constantly aware that there is usually something else driving the market behavior. So why would China defend the yuan when a weaker currency might be seen as in its best interest? The short answer is to curtail capital flight – money leaving China (or Japan for that matter) to a safer destination – and not to be ignored, to issue a warning to speculators shorting the yuan that China is prepared to spoil the party if need be.

In the interest of posting this report quickly, we will shorten it this morning to the above with a promise to update if market movement and information availability warrant it.

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Posted in dailyquotes |

Gold feels the stirrings of a breeze ‘midst the summer doldrums

DAILY MARKET REPORT

Gold, lately becalmed in the annual summer doldrums, felt the first stirrings of a breeze this morning – rising nearly $11 to trade at the $1219 level. Silver was similarly disposed trading 22¢ higher at $15.54.  Two factors of interest converged to put a breeze in gold’s sails – a less than gratifying jobs report and word that China had intervened “to cushion the yuan, ” as Bloomberg tells it.  The Japanese yen, as has been its practice of late, quickly followed the yuan higher.

For those just learning about gold, we will repeat something we have written about often here. It is not sufficient to simply report that gold is down because the dollar is up, as much of the mainstream financial media is wont to do.

Instead, we should be constantly aware that there is usually something else driving the market behavior.  So why would China defend the yuan when a weaker currency might be seen as in its best interest?  The short answer is to curtail capital flight – money leaving China (or Japan for that matter) to a safer destination – and not to be ignored, to issue a warning to speculators shorting the yuan that China is prepared to spoil the party if need be.

In the interest of posting this report quickly, we will shorten it this morning to the above with a promise to update if market movement and information availability warrant it.

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Posted in Today's top gold news and opinion |

Gold meanders, Sino-U.S. trade muddle deepens as both sides dig in heels

Gold wandered listlessly this morning as both sides in the Sino-U.S. trade dispute dug in their heels – one calling for wider and sharply higher tariffs, the other stating that it would not be pushed around. The yellow metal managed a small gain in Asia only to lose the advantage in European trading. As this report is posted, it is trading at $1215, down $2 on the day. Silver is even at $15.41.

The hardening of positions on both sides, coupled with the inability to get negotiations off the ground, has soured the mood in financial markets across the spectrum and around the world. A statement in this morning’s Wall Street Journal from “a senior administration official” summed up the deteriorating state of affairs: “Communications remain open. There are conversations about whether to have fruitful negotiations or not.” So we are having a conversation about whether or not we are going to have a conversation. We’ll let that one stand on its own. . .That same article linked the latest threat of tariff increases from 10% to 25% to the devaluation of the yuan.

Quote of the Day
“What does it mean for gold’s value proposition? First, gold does not appear to be expensive at the current price. In fact, there is reason to assume that it is (to borrow a term from the investment world) undervalued. Second, gold – if you look at it as a form of money – offers a hedge against the vagaries of the fiat money world. It cannot be debased by central banks’ money printing, and it does not carry a default or counter-party risk. Reflected upon from this perspective, gold certainly has not lost its shine for the long-term oriented investor. This becomes clear once the investor realizes that gold is not an investment instrument but a form of money – in fact, the best and most honest kind of money available.” – Degussa Market Report

Chart of the Day

Chart note: China’s yuan is down nearly 9% against the dollar since the beginning of the year. In competition with the yuan particularly in Asia, the yen has mimicked the yuan and movement in the two obviously has pushed the dollar higher. All of these currencies on a longer timeline, including the dollar, are in the process of being debased informally by their respective governments in terms of their overall purchasing power giving substantial credence to today’s Quote of the Day.

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Gold meanders, Sino-U.S. trade muddle deepens as both sides dig in heels

DAILY MARKET REPORT

Gold wandered listlessly this morning as both sides in the Sino-U.S. trade dispute dug in their heels – one calling for wider and sharply higher tariffs, the other stating that it would not be pushed around.  The yellow metal managed a small gain in Asia only to lose the advantage in European trading.  As this report is posted, it is trading at $1215, down $2 on the day.  Silver is even at $15.41.

The hardening of positions on both sides, coupled with the inability to get negotiations off the ground, has soured the mood in financial markets across the spectrum and around the world.  A statement in this morning’s Wall Street Journal from “a senior administration official” summed up the deteriorating state of affairs:  “Communications remain open.  There are conversations about whether to have fruitful negotiations or not.”  So we are having a conversation about whether or not we are going to have a conversation.  We’ll let that one stand on its own. . .That same article linked the latest threat of tariff increases from 10% to 25% to the devaluation of the yuan.

Quote of the Day
“What does it mean for gold’s value proposition? First, gold does not appear to be expensive at the current price. In fact, there is reason to assume that it is (to borrow a term from the investment world) undervalued. Second, gold – if you look at it as a form of money – offers a hedge against the vagaries of the fiat money world. It cannot be debased by central banks’ money printing, and it does not carry a default or counter-party risk. Reflected upon from this perspective, gold certainly has not lost its shine for the long-term oriented investor. This becomes clear once the investor realizes that gold is not an investment instrument but a form of money – in fact, the best and most honest kind of money available.” – Degussa Market Report

Chart of the Day

Chart note:  China’s yuan is down nearly 9% against the dollar since the beginning of the year.  In competition with the yuan particularly in Asia, the yen has mimicked the yuan and movement in the two obviously has pushed the dollar higher.  All of these currencies on a longer timeline, including the dollar, are in the process of being debased informally by their respective governments in terms of their overall purchasing power giving substantial credence to today’s Quote of the Day.

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Posted in Today's top gold news and opinion |

DMR–The Fed meets. Gold goes down. Like clockwork.

DAILY MARKET REPORT

The Fed meets. Gold goes down. Like clockwork.

This week is no exception though the past three days’ downside has been mild compared to Fed week performances in the recent past. This afternoon we are scheduled for an announcement on what transpired at the meeting. That announcement is not expected to contain any surprises.

That said there is this nettlesome problem of every other major nation state easing monetary policy while the United States tightens. The dollar has been the unwelcome beneficiary in this process. China, Japan, Europe and most of the rest of the world, on the other hand, have watched with gratification as their currencies have sagged. The president has commented notably on the situation and the Fed chairman, even before the president’s comments, seemed to be treading lightly.

“Recent pressure from the president is having no impact on how they [the Fed] respond to data,” Priya Misra, head of global rates strategy at TD Securities recently told Bloomberg. “Ultimately, they will do what is right for the economy.”

That, I imagine, is cipher for saying that the Fed will continue on the path of raising interest rates despite the European Union and the ECB acting in concert to keep the euro down, Japan and the BoJ acting in concert to keep the yen down and China and the PBoC acting in concert to keep the yuan down. The Fed for its part continues on an interest rate path designed, it asserts, to provide space for lowering rates the next time a crisis occurs – a crisis, by the way, that could very well be instigated by the Fed raising rates.

Nevertheless, though unlikely, a minor surprise could be in the offing. If so, it would probably be in the direction of helping gold, not hindering it.

As it is, gold is down $4.50 on the day at $1220. Silver is down 11¢ at $15.44.

Quote of the Day
“I have a rather simple Bubble definition: ‘A self-reinforcing but inevitably unsustainable inflation.’ Most Bubble discussions center on the deflating rather than the inflating phase. A focus of my analysis is the progressively powerful dynamics that fuel Bubble excess, along with attendant distortions and maladjustment – and how they sow seeds of their own destruction. The ongoing ‘global government finance Bubble’ is unique in history. Rarely has market intervention and manipulation been so widely championed. Never have governments and central banks on a concerted basis inflated government debt and central bank Credit. And almost a full decade since the crisis, the massive inflation of ‘money’-like government obligations runs unabated – across the continents.” – Doug Noland, Credit Bubble Bulletin

Chart of the Day

Chart note: This chart summarizes the relationship between U.S. government debt and the purchasing power of the dollar since the early 1970s when the United States abandoned gold and launched the era of fiat money and an ever-expanding national debt. In that period of time, the national debt has gone from $302.6 billion to $2.1 trillion and the dollar has lost nearly 87% of its purchasing power.

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Posted in dailyquotes |

DMR–The Fed meets. Gold goes down. Like clockwork.

DAILY MARKET REPORT

The Fed meets.  Gold goes down. Like clockwork.

This week is no exception though the past three days’ downside has been mild compared to Fed week performances in the recent past.  This afternoon we are scheduled for an announcement on what transpired at the meeting.  That announcement is not expected to contain any surprises.

That said there is this nettlesome problem of every other major nation state easing monetary policy while the United States tightens. The dollar has been the unwelcome beneficiary in this process. China, Japan, Europe and most of the rest of the world, on the other hand, have watched with gratification as their currencies have sagged.  The president has commented notably on the situation and the Fed chairman, even before the president’s comments, seemed to be treading lightly.

“Recent pressure from the president is having no impact on how they [the Fed] respond to data,” Priya Misra, head of global rates strategy at TD Securities recently told Bloomberg. “Ultimately, they will do what is right for the economy.”

That, I imagine, is cipher for saying that the Fed will continue on the path of raising interest rates despite the European Union and the ECB acting in concert to keep the euro down, Japan and the BoJ acting in concert to keep the yen down and China and the PBoC acting in concert to keep the yuan down.  The Fed for its part continues on an interest rate path designed, it asserts, to provide space for lowering rates the next time a crisis occurs – a crisis, by the way, that could very well be instigated by the Fed raising rates.

Nevertheless, though unlikely, a minor surprise could be in the offing. If so, it would probably be in the direction of helping gold, not hindering it.

As it is, gold is down $4.50 on the day at $1220.  Silver is down 11¢ at $15.44.

Quote of the Day
“I have a rather simple Bubble definition: ‘A self-reinforcing but inevitably unsustainable inflation.’ Most Bubble discussions center on the deflating rather than the inflating phase. A focus of my analysis is the progressively powerful dynamics that fuel Bubble excess, along with attendant distortions and maladjustment – and how they sow seeds of their own destruction. The ongoing ‘global government finance Bubble’ is unique in history. Rarely has market intervention and manipulation been so widely championed. Never have governments and central banks on a concerted basis inflated government debt and central bank Credit. And almost a full decade since the crisis, the massive inflation of ‘money’-like government obligations runs unabated – across the continents.” – Doug Noland, Credit Bubble Bulletin

Chart of the Day

Chart note:  This chart summarizes the relationship between  U.S. government debt and the purchasing power of the dollar since the early 1970s when the United States abandoned gold and launched the era of fiat money and an ever-expanding national debt.  In that period of time, the national debt has gone from $302.6 billion to $2.1 trillion and the dollar has lost nearly 87% of its purchasing power. 

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Posted in Today's top gold news and opinion |

This ‘prophet of doom’ predicts stock market will plunge more than 50%

MarketWatch/Sue Chang/7-31-2018

“In his most recent call, [John Hussman] argued that measured ‘from their highs of early-2018, we presently estimate that the completion of the current cycle will result in market losses on the order of -64% for the S&P 500 index, -57% for the Nasdaq-100 Index, -68% for the Russell 2000 index, and nearly -69% for the Dow Jones Industrial Average.’”

USAGOLD note:  Trees, as Richard Russell used to say, do not grow to the sky.


Repost from July, 2018

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Posted in RepostKeepers, Short and Sweet, Today's top gold news and opinion |

A spectacular set of old Mexican 50 pesos from the 1920s

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For the connoisseur, this 10-coin set of old Mexican 50 pesos in uncirculated condition is something to behold – a full date run from 1922-1930.  It can be had now at a very favorable price, but we only have two sets available and, as always, it’s first-come, first-served. These are large coins each weighing 1.2056 troy ounces that track the price of gold and offer, in addition, a chance of gain in collector’s premium as time goes by.

We also have several other sets on offer requiring much less of an outlay – British sovereigns, Dutch guilders and more historic Mexican coinage. We invite you to visit HERE to see what else is available.

You can order direct at our Online Order Desk or call 1-800-869-5115, X100.

___________________________________________________________________________

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Posted in Today's top gold news and opinion |

Putting the cart before the horse: Gold Hype

CLIENT UPDATE

MishTalk/Mike Shedlock/7-21-2018

“It is important to put the horse in front of the cart. The commercial market makers (the cart) react to the horse (the specs). Speculative sentiment rests with the horse, not the cart.”

USAGOLD note: There is, and always has been, a lot of disinformation and off-the-wall interpretations with respect to the weekly COMEX Commitment of Traders reports. This article sorts out the confusion and puts things in their proper perspective, especially with respect to what these reports signal. The commercials – in the case of gold that amounts to the bullion banks – simply take the other side of the trade presented by the speculators.

As Shedlock explains, the bullion banks are the cart and speculators are the horse with the speculators driving the action. Speculators have increasingly gone short gold over the past several weeks pushing the market lower, but as we have said repeatedly here, those shorts at some point need to be filled in order to lock-in profits. At the moment, the COMEX gold short position is near record levels establishing the need for significant covering. “I like this set-up,” says Shedlock in a separate article.

 

 

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Posted in dailyquotes |

Gold catches Asia tailwind on yen, yuan factors

Gold caught something of a tailwind in Asia overnight that pushed it to the $1333.50 level, up $8 on the day. A stronger Japanese yen and Chinese yuan were major contributors to the upswing. The yen moved higher on internal polices aimed at stemming capital flows out of the country. China’s yuan surprisingly moved higher despite a recently unveiled government stimulus program and a weaker PBoC yuan fix – two factors that should have pushed the exchange rate lower. Silver is also higher at $15.63 (+14¢).

The president’s recent attack on the Fed’s rate-raising policies – what Axel Merck called the “Trump put” – will now become a major factor in any practical analysis of the forex and gold markets. Former Minnesota Fed president Narayana Kocherlakota offered an interesting insight in a recent Bloomberg opinion piece. “President Donald Trump,” he said, “has recently taken an aggressive stance toward the Federal Reserve, publicly criticizing it for choking off growth by setting interest rates too high. Together with remarks made by other administration officials, this raises a troubling possibility: that the White House could pressure the central bank into taking actions that would lead to unduly high inflation.” By the end of the piece, he warns of a return to the “Great Inflation” that ran from 1965 through 1982.

Quote of the Day
“I’m fond of saying how crazy things get near the end of Bubbles. Convinced this is History’s Greatest Bubble, I’ve been anticipating a pretty astonishing variety of ‘crazy.’ Watching this all unfold with increasing trepidation, I sense an important line has been crossed. It’s time to retire ‘crazy’ – find a replacement that conjures up something more foreboding – more disturbing. And markets, well, they’re seemingly fine with it all; at times almost giddy. And that’s the fundamental problem: Dysfunctional markets continue to promote incredibly risky policy behavior – the polar (bear) opposite of imposing discipline.” – Doug Noland, Credit Bubble Bulletin

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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Gold catches Asia tailwind on yen, yuan factors

DAILY MARKET REPORT

Gold caught something of a tailwind in Asia overnight that pushed it to the $1333.50 level, up $8 on the day. A stronger Japanese yen and Chinese yuan were major contributors to the upswing.  The yen moved higher on internal polices aimed at stemming capital flows out of the country.  China’s yuan surprisingly moved higher despite a recently unveiled government stimulus program and a weaker PBoC yuan fix – two factors that should have pushed the exchange rate lower. Silver is also higher at $15.63 (+14¢).

The president’s recent attack on the Fed’s rate-raising policies – what Axel Merck called the “Trump put” – will now become a major factor in any practical analysis of the forex and gold markets. Former Minnesota Fed president Narayana Kocherlakota offered an interesting insight in a recent Bloomberg opinion piece. “President Donald Trump,” he said, “has recently taken an aggressive stance toward the Federal Reserve, publicly criticizing it for choking off growth by setting interest rates too high. Together with remarks made by other administration officials, this raises a troubling possibility: that the White House could pressure the central bank into taking actions that would lead to unduly high inflation.”  By the end of the piece, he warns of a return to the “Great Inflation” that ran from 1965 through 1982.

Quote of the Day
“I’m fond of saying how crazy things get near the end of Bubbles. Convinced this is History’s Greatest Bubble, I’ve been anticipating a pretty astonishing variety of ‘crazy.’ Watching this all unfold with increasing trepidation, I sense an important line has been crossed. It’s time to retire ‘crazy’ – find a replacement that conjures up something more foreboding – more disturbing. And markets, well, they’re seemingly fine with it all; at times almost giddy. And that’s the fundamental problem: Dysfunctional markets continue to promote incredibly risky policy behavior – the polar (bear) opposite of imposing discipline.” – Doug Noland, Credit Bubble Bulletin

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 Today's top gold news and opinion |

Gold drops again on stand aside PBoC yuan devaluation stance

Gold took a southerly turn in today’s early trading in response to sharp drop in the Chinese yuan. It is down $6.50 at $1225 following a surge late last week that took it back over the $1230 mark. Silver is down 9¢ at $15.43.

The president’s rhetoric late last week attempting to counter devaluation of the yuan, it would seem, has fallen on deaf ears. The precipitous drop in the yuan continues unabated (see today’s Chart of the Day) with the Peoples Bank of China sending a message of its own: It will stand aside and let the yuan drop on international currency markets.

As reported here last week, China is stepped up a dovish monetary policy, including a stronger dose of quantitative easing, while the Fed chairman over the weekend pledged to stay the course on raising in interest – all to the chagrin of the sitting president of the United States, who appears powerless in the face of it all. None of this has escaped the notice of international currency traders.

Meanwhile, through it all, China continues to import massive amounts of the “barbarous relic” to balance its huge dollar-based reserves. It imported 400 tonnes in the second quarter – about two-thirds of the global mine production. We would add that those imports crossed China’s border at very favorable prices.

Quote of the Day
“The currency should be depreciating from a broad macro perspective – you have the Fed hiking and PBOC easing, so at some point it will be reflected in the FX market. This is still in line with the broader PBOC policy of introducing more volatility and letting the market play itself out.” – Frederic Neumann, co-head of Asian economics research at HSBC Holdings Plc in Hong Kong (Bloomberg interview)

Chart of the Day

Carryover Update

Last week in Myra Saefong’s MarketWatch afternoon gold market update:

“I do not believe that the trade wars at present are the dominant issue for gold and the dollar,” Michael Kosares, founder of gold broker USAGOLD, told MarketWatch. “Both, I believe, are still caught up in a syndrome dictated by dovish interest-rate policy across both oceans, while the U.S. continues to raise rates. That could all change in a heartbeat, though, if the inflation rate begins to run consistently higher than interest rates.”

Reports have surfaced that China’s central bank is aggressively pursuing its own version of a quantitative easing program. (Read here) Simultaneously it fixed the yuan top-shelf exchange rate lower signalling it was interested in a weaker yuan against the dollar and other currencies. The combination sent gold reeling overnight in Asian markets – down $14 at one point. Gold has staged a minor recovery in early U.S. trading and is now down $10 at $1217. Increasingly, currency traders are suggesting that the Fed may be forced to act. In an editorial this morning, the Financial Times warns “The U.S. central bank must be prepared to halt or reverse rates. . . if financial stability is threatened.”

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Gold drops again on stand aside PBoC yuan devaluation stance

DAILY MARKET REPORT

Gold took a southerly turn in today’s early trading in response to sharp drop in the Chinese yuan. It is down $6.50 at $1225 following a surge late last week that took it back over the $1230 mark. Silver is down 9¢ at $15.43.

The president’s rhetoric late last week attempting to counter devaluation of the yuan, it would seem, has fallen on deaf ears.  The precipitous drop in the yuan continues unabated (see today’s Chart of the Day) with the Peoples Bank of China sending a message of its own:  It will stand aside and let the yuan drop on international currency markets.

As reported here last week, China is stepped up a dovish monetary policy, including a stronger dose of quantitative easing, while the Fed chairman over the weekend pledged to stay the course on raising in interest – all to the chagrin of the sitting president of the United States, who appears powerless in the face of it all.  None of this has escaped the notice of international currency traders.

Meanwhile, through it all, China continues to import massive amounts of the “barbarous relic” to balance its huge dollar-based reserves.  It imported 400 tonnes in the second quarter – about two-thirds of the global mine production.  We would add that those imports crossed China’s border at very favorable prices.

Quote of the Day
“The currency should be depreciating from a broad macro perspective – you have the Fed hiking and PBOC easing, so at some point it will be reflected in the FX market. This is still in line with the broader PBOC policy of introducing more volatility and letting the market play itself out.” – Frederic Neumann, co-head of Asian economics research at HSBC Holdings Plc in Hong Kong (Bloomberg interview)

Chart of the Day

Carryover Update

Last week in Myra Saefong’s MarketWatch afternoon gold market update:

“I do not believe that the trade wars at present are the dominant issue for gold and the dollar,” Michael Kosares, founder of gold broker USAGOLD, told MarketWatch. “Both, I believe, are still caught up in a syndrome dictated by dovish interest-rate policy across both oceans, while the U.S. continues to raise rates. That could all change in a heartbeat, though, if the inflation rate begins to run consistently higher than interest rates.”

Reports have surfaced that China’s central bank is aggressively pursuing its own version of a quantitative easing program. (Read here) Simultaneously it fixed the yuan top-shelf exchange rate lower signalling it was interested in a weaker yuan against the dollar and other currencies. The combination sent gold reeling overnight in Asian markets – down $14 at one point. Gold has staged a minor recovery in early U.S. trading and is now down $10 at $1217. Increasingly, currency traders are suggesting that the Fed may be forced to act. In an editorial this morning, the Financial Times warns “The U.S. central bank must be prepared to halt or reverse rates. . . if financial stability is threatened.”

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Gold trades lower on Friday the thirteenth

DAILY MARKET REPORT

Friday the thirteenth. . . . . .Gold is trading at the $1242 mark this morning (down $4.00) after having gotten as low as $1238 in European markets. Which way it will break from here remains an open question as the annual summer slowdown lingers, commodities continue to track lower, and the dollar, at least for now, reigns supreme in currency markets. In its market report this morning, Investing.com poses an interesting scenario, “Interestingly, Asian and European stocks were mostly higher today as investors yet again attempted to shrug off trade tensions. Could markets be turning increasingly numb to global trade developments? This may be the question of the quarter if stock markets and riskier assets continue to push higher despite trade tensions escalating.” And, by the way, if the one asset that should be flourishing in this environment continues to languish . . . .

With that thought we will leave you for the week and alert you that we will be posting only intermittently for the next couple of weeks as we move to a mid-summer schedule.

Quote of the Day
“Buying gold today is a statement that you believe that global economic events may spiral out of the control of Central Bankers. It is insurance against some sort of massive monetary policy mistake that cannot be fixed without re-conceptualizing the global economic regime – hyperinflation in a developed nation, the collapse of the Euro, something like that – not an expression of a commonly shared belief in some inherent value of gold.. . . . The stronger the Narrative of Central Banker Omnipotence, the more likely it is that the price of gold goes down. The weaker the Narrative – the less established the Common Knowledge that central bank policy determines market outcomes – the more likely it is that the price of gold will go up. In other words, it’s not central bank policy per se that makes the price of gold go up or down, it’s Common Knowledge regarding the ability of central banks to control economic outcomes that makes the price of gold go up or down.” – W. Ben Hunt, Epsilon Theory

Chart of the Day

Chart note: There is much concern about the flattening yield curve, i.e., the convergence of rates in various U.S. sovereign debt instruments and what it might portend for the future. In pulling together the data for these charts, we could not help but take special note of the two previous occasions in which there was a similar convergence – in 2000 just before and during the bursting of the dotcom bubble and in 2007-2008 just before and during the Bear Sterns/Lehman Brothers’ implosions. Both breakdowns, by the way, occurred coincident with an upswing in interest rates.

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DMR–Gold trades lower on Friday the thirteenth

DAILY MARKET REPORT

Friday the thirteenth. . . . . .Gold is trading at the $1242 mark this morning (down $4.00) after having gotten as low as $1238 in European markets.  Which way it will break from here remains an open question as the annual summer slowdown lingers, commodities continue to track lower, and the dollar, at least for now, reigns supreme in currency markets. In its market report this morning, Investing.com poses an interesting scenario, “Interestingly, Asian and European stocks were mostly higher today as investors yet again attempted to shrug off trade tensions. Could markets be turning increasingly numb to global trade developments? This may be the question of the quarter if stock markets and riskier assets continue to push higher despite trade tensions escalating.”  And, by the way,  if the one asset that should be flourishing in this environment continues to languish . . . .

With that thought we will leave you for the week and alert you that we will be posting only intermittently for the next couple of weeks as we move to a mid-summer schedule. 

Quote of the Day
“Buying gold today is a statement that you believe that global economic events may spiral out of the control of Central Bankers. It is insurance against some sort of massive monetary policy mistake that cannot be fixed without re-conceptualizing the global economic regime – hyperinflation in a developed nation, the collapse of the Euro, something like that – not an expression of a commonly shared belief in some inherent value of gold.. . . . The stronger the Narrative of Central Banker Omnipotence, the more likely it is that the price of gold goes down. The weaker the Narrative – the less established the Common Knowledge that central bank policy determines market outcomes – the more likely it is that the price of gold will go up.  In other words, it’s not central bank policy per se that makes the price of gold go up or down, it’s Common Knowledge regarding the ability of central banks to control economic outcomes that makes the price of gold go up or down.” – W. Ben Hunt, Epsilon Theory

Chart of the Day

Chart note:  There is much concern about the flattening yield curve, i.e., the convergence of rates in various U.S. sovereign debt instruments and what it might portend for the future.  In pulling together the data for these charts, we could not help but take special note of the two previous occasions in which there was a similar convergence – in 2000 just before and during the bursting of the dotcom bubble and in 2007-2008 just before and during the Bear Sterns/Lehman Brothers’ implosions. Both breakdowns, by the way, occurred coincident with an upswing in interest rates.

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Gold shifts to higher ground, real rate of return goes negative on U.S. government paper

Gold shifted to higher ground this morning after the government released its latest consumer price report which showed inflation pushing the 3% mark – a rate that puts the real rate of return on government paper in negative territory, even the 30-year bond. Such stirrings are the sort of thing that can motivate a shift in investor perceptions – with commodities and gold being among the usual beneficiaries in a negative return environment. Today’s inflation number might mark something of a turning point in that regard, particularly when you take into consideration that sentiment favors rising inflation as a probable outcome of the trade war. As it stands, gold is up $4 on the day at $1247 and silver is up 12¢ at $15.94.

Quote of the Day
“Reality is far more vicious than Russian roulette. First, it delivers the fatal bullet rather infrequently, like a revolver that would have hundreds, even thousands of chambers instead of six. After a few dozen tries, one forgets about the existence of a bullet, under a numbing false sense of security. Second, unlike a well-defined precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality. One is capable of unwittingly playing Russian roulette – and calling it by some alternative ‘low risk’ game.” ― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

Chart of the Day

Chart note: Few correlations in the financial markets ring truer and more consistently than the one between the federal debt and gold. That relationship between the two is about as fundamental as it gets. For those with capital preservation as the goal, gold has been a stalwart and productive ally since the United States went off the gold standard in 1971 and launched the era of fiat money, federal deficits and the massive federal debt. As for the future, we should keep in mind that the very same conditions which created the long-term secular trend for both the national debt and gold are still in place today – nothing has changed fundamentally. As long as that is the case, we can assume gold will continue to attract capital as a long-term portfolio hedge just as it has, to varying degrees, through the first 47 years of the fiat money system. Please note, too, that gold is trading below the federal debt’s trend line, an indication that it might have some catching up to do in the months and years ahead.

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DMR–Gold shifts to higher ground, real rate of return goes negative on U.S. government paper

DAILY MARKET REPORT

Gold shifted to higher ground this morning after the government released its latest consumer price report which showed inflation pushing the 3% mark – a rate that puts the real rate of return on government paper in negative territory, even the 30-year bond.  Such stirrings are the sort of thing that can motivate a shift in investor perceptions – with commodities and gold being among the usual beneficiaries in a negative return environment. Today’s inflation number might mark something of a turning point in that regard, particularly when you take into consideration that sentiment favors rising inflation as a probable outcome of the trade war.   As it stands, gold is up $4 on the day at $1247 and silver is up 12¢ at $15.94.

Quote of the Day
“Reality is far more vicious than Russian roulette. First, it delivers the fatal bullet rather infrequently, like a revolver that would have hundreds, even thousands of chambers instead of six. After a few dozen tries, one forgets about the existence of a bullet, under a numbing false sense of security. Second, unlike a well-defined precise game like Russian roulette, where the risks are visible to anyone capable of multiplying and dividing by six, one does not observe the barrel of reality. One is capable of unwittingly playing Russian roulette – and calling it by some alternative ‘low risk’ game.” ― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

Chart of the Day

Chart note: Few correlations in the financial markets ring truer and more consistently than the one between the federal debt and gold. That relationship between the two is about as fundamental as it gets. For those with capital preservation as the goal, gold has been a stalwart and productive ally since the United States went off the gold standard in 1971 and launched the era of fiat money, federal deficits and the massive federal debt. As for the future, we should keep in mind that the very same conditions which created the long-term secular trend for both the national debt and gold are still in place today – nothing has changed fundamentally. As long as that is the case, we can assume gold will continue to attract capital as a long-term portfolio hedge just as it has, to varying degrees, through the first 47 years of the fiat money system. Please note, too, that gold is trading below the federal debt’s trend line, an indication that it might have some catching up to do in the months and years ahead.

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

Traders hammer gold back to December levels

DAILY MARKET REPORT – AFTERNOON UPDATE

Traders hammered gold back to last December’s levels as commodities across the board took a hit on elevated concerns about a heavy escalation in the trade war between the United States and China. Bloomberg is reporting that China-US trade talks have ground to a complete halt.  Stocks markets across the globe also took a hit with the Dow finishing down 219 on the day.  The yuan, which has led currencies lower against the dollar over the past few days, finished at its lowest level since late 2016. Gold finished the day down $14 at $1242. Silver was down 21¢ at $15.79.

In a Reuters report this afternoon, William Rhind, chief executive officer at fund manager GraniteShares Inc, took a longer term view: “At the moment,” he said, “the positive inflationary pressures caused by trade tariffs are being beaten back by dollar strength. As the tariffs take hold and the market adjusts to the effects, we expect inflationary pressures to increase, which will benefit holders of gold and commodities.” Pushed to background today, producer prices logged a 3.4% gain led by rising oil and gasoline prices. Tomorrow we have the consumer price index report. MK

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Posted in dailyquotes |

Traders hammer gold back to December levels

DAILY MARKET REPORT – AFTERNOON UPDATE

Traders hammered gold back to last December’s levels as commodities across the board took a hit on elevated concerns about a heavy escalation in the trade war between the United States and China. Bloomberg is reporting that China-US trade talks have ground to a complete halt.  Stocks markets across the globe also took a hit with the Dow finishing down 219 on the day.  The yuan, which has led currencies lower against the dollar over the past few days, finished at its lowest level since late 2016. Gold finished the day down $14 at $1242. Silver was down 21¢ at $15.79.

In a Reuters report this afternoon, William Rhind, chief executive officer at fund manager GraniteShares Inc, took a longer term view: “At the moment,” he said, “the positive inflationary pressures caused by trade tariffs are being beaten back by dollar strength. As the tariffs take hold and the market adjusts to the effects, we expect inflationary pressures to increase, which will benefit holders of gold and commodities.” Pushed to background today, producer prices logged a 3.4% gain led by rising oil and gasoline prices. Tomorrow we have the consumer price index report. MK

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Gold drops with rest of commodities complex, producer prices signal possible inflationary trend

DAILY MARKET REPORT

Gold dropped in early trading today in sympathy with the rest of the commodities complex. Using the Bloomberg Commodity Index as a reference, raw commodities are down 1.25% as the markets attempt to factor in the impact of the latest round of tariff threats and counter-threats. Gold is down $5 at $1251 and silver is down 10¢ at $15.94. Echoing a theme we raised earlier today (see below), Bloomberg headlines a growing concern that the latest “tariff barrage” will push “China fight to the point of no return.” Meanwhile, the producer price index registered a 3.4% gain over the past 12 months – an indication, when coupled with last month’s 3.1% annualized gain, that an inflationary trend might be in motion. Tomorrow the BLS will release the consumer price index report.

Quote of the Day
“If you could go back to 2007 would you really choose these policies again? Had they been used as short-term shock therapy only, the central bankers might have got away with it. As it is they now made our economies more dysfunctional than ever – and, worse, they can’t find a way out. . .They helped get us into this. They are not having much luck getting us out. But our elected governments have still ceded such enormous power over our financial system to them that we have no choice but to listen to their every word – if we want to have a chance of figuring out how the next (inevitable) crisis will play out, that is. Of all the things that have happened since 2007 that, I think, is the one that makes the least sense of all.” – Merryn Somerset Webb, Editor-in-Chief, Money Week

Chart of the Day

Chart note: Much has been written and said about the lack of volatility in the financial markets over the past couple of years, but the volatility index can change direction abruptly and without notice. A single, negative event can send it soaring. If and when that happens, gold is likely to begin climbing as well as illustrated in the chart. Note how quickly the volatility index bolted higher in the early months of the 2008 financial crisis. Two months later, gold bottomed and began its historic run from the $750 level to nearly $1900 per ounce.

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DMR–Gold drops with rest of commodities complex, producer prices signal possible inflationary trend

DAILY MARKET REPORT

Gold dropped in early trading today in sympathy with the rest of the commodities complex.  Using the Bloomberg Commodity Index as a reference, raw commodities are down 1.25% as the markets attempt to factor in the impact of the latest round of tariff threats and counter-threats.  Gold is down $5 at $1251 and silver is down 10¢ at $15.94. Echoing a theme we raised earlier today (see below), Bloomberg headlines a growing concern that the latest “tariff barrage” will push “China fight to the point of no return.” Meanwhile, the producer price index registered a 3.4% gain over the past 12 months – an indication, when coupled with last month’s 3.1% annualized gain, that an inflationary trend might be in motion.  Tomorrow the  BLS will release the consumer price index report.

Quote of the Day
“If you could go back to 2007 would you really choose these policies again? Had they been used as short-term shock therapy only, the central bankers might have got away with it. As it is they now made our economies more dysfunctional than ever – and, worse, they can’t find a way out. . .They helped get us into this. They are not having much luck getting us out. But our elected governments have still ceded such enormous power over our financial system to them that we have no choice but to listen to their every word – if we want to have a chance of figuring out how the next (inevitable) crisis will play out, that is. Of all the things that have happened since 2007 that, I think, is the one that makes the least sense of all.” – Merryn Somerset Webb, Editor-in-Chief, Money Week

Chart of the Day

Chart note:  Much has been written and said about the lack of volatility in the financial markets over the past couple of years, but the volatility index can change direction abruptly and without notice. A single, negative event can send it soaring. If and when that happens, gold is likely to begin climbing as well as illustrated in the chart. Note how quickly the volatility index bolted higher in the early months of the 2008 financial crisis. Two months later, gold bottomed and began its historic run from the $750 level to nearly $1900 per ounce.

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Gold recovers from $1248 low in European trading, awaiting producer and consumer price reports

DAILY MARKET REPORT

Gold is down $4.50 on the day at $1254 after dipping below the $1250 level for the second time since this latest break began in early June. Gold turned around sharply during European trading hours after hitting a low of $1248. Silver is trading at $16.03 and down 7¢ on the day. Trading in both metals is irresolute and lacks clear direction – in short a typical day in the annual summer doldrums. It looks like short-sellers are looking to reverse their positions on dips at or below the $1250 level and may be a sign that the price has reached a bottom. Too, the precious metals could simply be in a wait and see mode with producer prices out tomorrow and consumer prices Thursday.

Quote of the Day
“I’m in the inflation camp. I think it’s coming. I have thought this for a while. People have looked all over for it as if looking for a lost sock or a hairpin: Where did it go? Where is that thing? But I do believe that the central bankers who have been kind of begging for inflation will be surprised at the generosity of the inflation gods over what they will ultimately be handed.” – James Grant, Grant’s Interest Rate Observer

Chart of the Day

Chart note: Since 1971, the year the United States went off the gold standard, freed the dollar to float against other national currencies and ushered in the fiat dollar international monetary system, gold has appreciated over 3000%. In “Essay on the Coinage of Money” (1526), Conpernicus, the famed astronomer, noted: “Although there are countless scourges which in general debilitate kingdoms, principalities, and republics, the four most important (in my judgment) are dissension, [abnormal] mortality, barren soil, and debasement of the currency. The first three are so obvious that nobody is unaware of their existence. But the fourth, which concerns money, is taken into account by few persons and only the most perspicacious. For it undermines states, not by a single attack all at once, but gradually and in a certain covert manner.” Today gold protects its owners against the nemesis of currency debasement as it has over the centuries and during the Copernicus’ times.

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DMR–Gold recovers from $1248 low in European trading, awaiting producer and consumer price reports

DAILY MARKET REPORT

Gold is down $4.50 on the day at $1254 after dipping below the $1250 level for the second time since this latest break began in early June. Gold turned around sharply during European trading hours after hitting a low of $1248.  Silver is trading at $16.03 and down 7¢ on the day. Trading in both metals is irresolute and lacks clear direction – in short a typical day in the annual summer doldrums. It looks like short-sellers are looking to reverse their positions on dips at or below the $1250 level and may be a sign that the price has reached a bottom.  Too, the precious metals could simply be in a wait and see mode with producer prices out tomorrow and consumer prices Thursday.

Quote of the Day
“I’m in the inflation camp. I think it’s coming. I have thought this for a while. People have looked all over for it as if looking for a lost sock or a hairpin: Where did it go? Where is that thing? But I do believe that the central bankers who have been kind of begging for inflation will be surprised at the generosity of the inflation gods over what they will ultimately be handed.” – James Grant, Grant’s Interest Rate Observer

Chart of the Day

Chart note:  Since 1971, the year the United States went off the gold standard, freed the dollar to float against other national currencies and ushered in the fiat dollar international monetary system, gold has appreciated over 3000%. In “Essay on the Coinage of Money” (1526), Conpernicus, the famed astronomer, noted: “Although there are countless scourges which in general debilitate kingdoms, principalities, and republics, the four most important (in my judgment) are dissension, [abnormal] mortality, barren soil, and debasement of the currency. The first three are so obvious that nobody is unaware of their existence. But the fourth, which concerns money, is taken into account by few persons and only the most perspicacious. For it undermines states, not by a single attack all at once, but gradually and in a certain covert manner.” Today gold protects its owners against the nemesis of currency debasement as it has over the centuries and during the Copernicus’ times.

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Special offer: U.S. $5 Liberties (19th century gold coins) at same price as modern quarter ounce Eagles

We opened the offer early this afternoon and have already had a strong response. . . . . .

If you like you can sign-up to purchase online here:
USAGOLD Online Order DeskIt only takes a minute or two.

If you would like to learn more, you can read about the offer HERE.

If you would like to order over the phone, please call your broker direct,
or if you are a new client, please call the
ORDER DESK at 1-800-869-5115, X100.

As always, orders will be filled on a first-come, first-served basis.
Your participation is welcome.

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