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Quiet day for gold, but up 11% on year

Gold traded marginally lower today – down $4.07 at $1280.90.  Silver was off 2¢ today finishing at $16.97.  With little in the way of news today, we thought it would be a good time to review the daily chart on gold.  As you can see, the uptrend on the year remains in place with gold still trading above the trend line.  Gold is up 11% on the year.  Silver is up 6.7%.

Quote of the Day
“Precious metals remain a relevant asset class in modern portfolios, despite their lack of yield.  They are neither a historic accident or a relic. . . Gold tends to preserve its real purchasing power over the very long run (albeit with substantial short-term deviations). Since Roman times, the real value of gold has remained more or less unchanged in the face of wars and political, social and technological shocks. Many investors therefore see gold as a way to hedge against structural tail risks, which could potentially erase the real value of all other financial assets.” – Jeffrey Currie and Michael Hinds, Goldman Sachs commodity analysts


If you are new to the USAGOLD website, we invite you to kick back and stay awhile. Do a little interest-driven browsing. We launched this website in 1997 and it has dutifully been providing guidance and market information to investors ever since. One of the most highly referenced and visited web portals in the gold business, this website goes deep. People are often surprised just how deep it goes. WELCOME!

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Gold, silver downtrends tracked to speculation on next Fed chair

Gold continued its downtrend today shedding another $10 at $1284.97.  Silver tagged along losing 20¢ on the day at $17.19.

There is some evidence that weakness in the gold market is associated with speculation about who might end taking the reins at the Federal Reserve come February, 2018.  Yesterday, reports surfaced that the John Taylor, the Stanford economist and perceived to be a policy hawk, made a favorable impression on the president in an interview for the Fed chair position last week.  The precious metals markets turned quickly to the downside following a Bloomberg report on the Taylor interview early yesterday. Any trading on who might be the next Fed chairman, though, is decidedly premature.  The president says he will make a decision over the next couple of weeks.

Gold is trading marginally higher in the overnight market.

Quote of the Day
“By 2020–2022 we would see record high gold prices in terms of nominal annual average prices. For the annual average price to be $1,650 or $1,700, that means that you’re going to have gold prices knocking on the door of $2,000.” – Jeffrey Christian, CPM Group, Managing Director


The October, 2017 issue of USAGOLD’s News & Views:

“Funds and institutions, so-called professional investors, are pouring large amounts of capital into gold through ETFs, straight-up physical ownership in the form of bullion, and paper ownership in the form of futures and options. In fact, institutional involvement may be unprecedented at this juncture and it is not just the high-profile gold advocates like Ray Dalio, Stanley Druckenmiller and David Einhorn pumping capital into the market, but hundreds of funds and institutions from one end to the globe to the other.”

Why is it important that gold is up all the major currencies?  Why are professional investors globally going for gold??  Is a new bull trend already underway as Jeffrey Christian suggests???

To learn more, we invite you to sign-up for our free monthly newsletter. Please keep us in mind if the time has come for you to either begin or add to your precious metals holdings.


 

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Gold tracks south in market skirmish at the $1300 mark

Gold suddenly took a turn south earlier today and ended the day down $8.68 at $1294.92.  Silver similarly turned to the downside losing 16¢ on the day at $17.19. After-hours both metals are moving sideways and lacking conviction. In the absence of any plausible explanation for today’s downside, we will go with the bulls and bears fighting it out in the paper gold arena over the $1300 price level and leave it that for the time being.

Quote of the Day
“In 1999 gold began to rally, and few could figure why. Anticipating proximate causes for major price trends is only speculation. Gold was well into a major upswing before the dot-com bust, 9/11, ultra-low interest rates, the housing bubble and mortgage-backed securities debacle, and the 2008 credit crash. These headlines of course fueled a bull trend that was already well underway. At the end of the day, price makes news and the headlines follow. The obvious lesson is that all markets, including gold, discount future events and that the development of prices in the absence of easily articulated causes must be respected.” – John Hathaway, Tocqueville Capital


The October, 2017 issue of USAGOLD’s News & Views:

“Funds and institutions, so-called professional investors, are pouring large amounts of capital into gold through ETFs, straight-up physical ownership in the form of bullion, and paper ownership in the form of futures and options. In fact, institutional involvement may be unprecedented at this juncture and it is not just the high-profile gold advocates like Ray Dalio, Stanley Druckenmiller and David Einhorn pumping capital into the market, but hundreds of funds and institutions from one end to the globe to the other.”

Why is it important that gold is up all the major currencies?  Why are professional investors globally going for gold??  Is a new bull trend already underway as John Hathaway suggests???

To learn more, we invite you to sign-up for our free monthly newsletter. Please keep us in mind if the time has come for you to either begin or add to your precious metals holdings.


 

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Gold pushes past $1300 mark, silver moving towards $17.50

Gold continued its march to higher ground today finishing above the $1300 mark at $1303.60.  Gold is up $10.00 on the day and $27 on the week, or 2.1%.  Silver followed suit up 16¢ on the day at $17.38, and 59¢ on the week, or 3.5%. Gold’s rise this week has taken investment markets by surprise and it will probably take some time to sort out the reasons for the sudden resurgence of interest in the precious metals.  Inquiries and sales are both up at USAGOLD over the past week, and investors are citing concerns about the long-term value of the dollar.

Quote of the Day
“In a lot of cultures, the word for money derives from the word for gold. In China, the ideogram for money is the ideogram for gold.” – Peter Oakley, Royal College of Arts (UK)


Commonality is probably something you would not expect to find as an attribute of a brokerage firm, but when it comes to gold it is an important one. Having a similar world view goes a long way in establishing the common ground essential to a good working relationship. For over 40 years we have resolutely advocated owning gold for asset preservation purposes. Admittedly, this philosophy does not resonate with all prospective gold owners, but if it does with you, we think you will find USAGOLD a kindred spirit.
If the time has come for you to begin or extend your gold and silver ownership plans – if you are raising the red flag – we invite you contact us and find out why thousands have chosen us as their gold firm.
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The Daily Market Report: Gold Could Gain Significantly in Weak Dollar/Growing Debt Environment


USAGOLD/Peter Grant/10-13-17

Gold typically trades inversely to the dollar, or whichever currency it is being measured against. USAGOLD founder and president Mike Kosares wrote in this month’s newsletter that many might be surprised to find that gold is up against every major currency this year.

Euro –– + 1.1%
Japanese yen –– + 8.0%
Chinese yuan –– + 6.5%
Swiss franc –– + 6.1%
British pound –– + 3.4%
Australian dollar –– + 2.1%
Canadian dollar –– + 3.2%
U.S. dollar –– + 11.5%
(As of 9/27/2017.)

Gold is up this year not just in dollars but in every major currency

Be sure to sign-up for our free monthly newsletter HERE.

Gold market expert Egon von Greyerz sees the long-term downtrend in the dollar as one of his 10 Factors To Propel Gold 10 Fold.

The dollar has been in a strong downtrend since 1971 when Nixon ended the gold backing. This was a disastrous decision for the world’s financial system and for the US economy. It has led to a total collapse of the dollar and a financial system based on debt only. — Egon von Greyerz

I would suggest the downtrend in the dollar goes back much further, to the late-1800 and the end of the Spanish American War. However, most analysts benchmark 1913 and the advent of the Fed. The BLS’s own CPI Inflation Calculator shows that a 1913 dollar presently has 4¢ of purchasing power. In other words, the value of that 1913 dollar has devalued by 96% since the Fed came into being.

The price of gold in 1913 was fixed at $20.67. In the intervening years — and even taking into consideration the corrective consolidative phase since the 2011 peak — the price of gold has risen a whopping 6,189%.

Can the dollar’s value really erode further? Absolutely. Over time, that 4¢ in purchasing power will become 2¢, will become a penny and then we’ll be talking fractions of cents. It is the inevitable reality of a fiat currency in a net-debtor nation.

And what of that debt? Last month, Congress suspended the debt ceiling yet again, allowing our national debt to surge beyond $20 trillion.

When the debt ceiling is reinstated on December 08, you should have no doubt as to what will happen. Oh sure, there may be at least a little debate next time, but the debt ceiling will be raised or suspended once again. There is absolutely no reason to consider any other conclusion. Since the very first debt ceiling was implemented in 1917, there’s never been a level that hasn’t ultimately been exceeded. In it’s entire 100-year history, the debt ceiling has never been lowered.

If you asked me to bet the “over/under” on the debt in 2027, I would bet the over at $35 trillion. — John Mauldin of Mauldin Economics

I think the national debt could easily double in the next decade, so I’d have to take the “over” as well. The only way out government will be able to service such a massive debt load will be to weaken the dollar, as it has since President Nixon closed the gold window in 1971, ending convertibility of the dollar to gold.

“I directed [Treasury] Secretary Connolly to suspend temporarily, the convertibility of the dollar into gold or other reserve assets, accept in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.” — President Richard M. Nixon, August 15, 1971

Nearly 50-years later, I think we can all agree there was nothing “temporary” about it. Nixon also called concerns about devaluation a “bugaboo,” claiming that “the effects of this action will be to stabilize the dollar.” In reality, nothing could have been further from the truth. The dollar tumbled in value against other currencies and against gold.

At the time of Nixon’s speech, gold was trading around $43 per ounce. By January of 1980, it had reached a high of $850, nearly a 20-fold increase.

The dollar index has fallen about 9% YTD in 2017. The recent 3% corrective bounce seems to have lost momentum, suggesting the dominant downtrend is re-exerting itself. A weaker dollar into year-end bodes well for higher gold prices over the same period. This may be the last opportunity to buy gold at these levels.

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Gold continues uptrend begun on Friday, silver shines

Gold continued an uptrend that began on Friday registering a nearly $8 gain today at $1283.83, but that only tells part of the story.  Since the yellow metal hit bottom early Friday at $1260, it is up almost $24 (+2%).  Silver recorded an even stronger gain from its early Friday bottom – up 67¢ at $16.93 (+4%).  It was up 14¢ today.  Both metals are trading higher in the overnight market.

We will stick with our long-stated view that most of the downside in both metals over the past nearly 30 days has been the result of technical trading.  Likewise, the past two days’ upside appears technical as well with support coming-in near the 200-day moving average at $1254.  In the meanwhile, opportunistic physical investors continue to load up.

Quote of the Day
“The really exciting thing is gold’s October seasonal bottom is the last one before this metal’s strongest seasonal rally of the year. On average gold’s winter rally propels it 9.5% higher in bull-market years by late February. That 9.5% winter rally well outguns the 6.9% average autumn rally that recently ended, and dwarfs the 3.8% average spring rally. We are right at gold’s most-bullish time of the year seasonally! Gold has real potential to enjoy a monster winter rally this year, especially if these insane stock markets start to roll over under the Fed’s just-unleashed quantitative-tightening juggernaut.” – Adam Hamilton, Zeal LLC


If you are new to the USAGOLD website, we invite you to kick back and stay awhile. Do a little interest-driven browsing. We launched this website in 1997 and it has dutifully been providing guidance and market information to investors ever since.
One of the most highly referenced and visited web portals in the gold business, this website goes deep. People are often surprised just how deep it goes. As a launchpad, we offer a quick website tour that hits the high points and suggests links, but it’s the depth, practicality and ease of use that will keep you coming back.
WELCOME!  And please keep us in mind for your next precious metals purchase.

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Gold stages turnaround on North Korea report

Russian new agency reports that North Korea is planning to test a missile capable of reaching west coast of United States. Unconfirmed.

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Gold down today on trend continuation

Gold was down today on a continuation of trends in place since mid-September. It finished at $1268.17 off $6.55 on the day.  Silver also tracked lower finishing the day at $16.57, down 4¢.  Both metals have had trouble finding solid footing amidst the unwinding of commodity exchange long positions and some short-selling.

Meanwhile, the World Gold Council reported earlier today that ETF inflows continued unabated as the price dropped in September. Thus far this year ETFs have added 192 tonnes of gold to their holdings. ETFs are the favored vehicle for funds and institutions  globally. In short, as speculators unloaded paper positions, physical accumulators loaded up.

Quote of the Day
“With its long history as a store of value independent of the financial system, gold is a natural investment for many German investors. In 2016, Kantar TNS surveyed more than 2,000 German investors on our behalf, revealing that:

• 59% of respondents agreed with the statement that gold will never lose its value in the long-term
• 48% agreed with the statement that owning gold makes me feel secure for the long-term • 42% agreed with the statement I trust gold more than the currencies of countries.

When asked why they invested in gold, 57% of bar and coin investors said it was to protect their wealth and 28% said it was to make good returns in the long-term. It is clear gold fulfils an important long-term, wealth preservation role in German investors’ portfolios.” – World Gold Council, Germany’s Golden Decade

In keeping with that quote from the World Gold Council, new visitors might be interested to know that USAGOLD agrees with German investors on gold’s role in the long-term investment portfolio.  Here is a page posted for high net worth investors that outlines our philosophy in that regard. . . .From that page:

Commonality is probably something you would not expect to find as an attribute of a brokerage firm, but when it comes to gold it is an important one. Having a similar world view goes a long way in establishing the common ground essential to a good working relationship. For over 40 years we have resolutely advocated owning gold for asset preservation purposes. Admittedly, this philosophy does not resonate with all prospective gold owners, but if it does with you, we think you will find our firm a kindred spirit.”


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Bitcoin is Not New and Improved Money


24hGold/Michael Pento/10-05-17

Cryptocurrencies are being billed as a new and improved form of money that has been offered to us courtesy of technological evolution. There is a big problem with this conclusion. That is, digital money is not money at all. And proving this truth serves to underscore why gold has been utilized as the best form of money for thousands of years.

…sooner or later, all governments may join with China–sending shock waves through the growing market for virtual currencies. And while virtual currencies will still be able to be exchanged in the “back alleys” of the digital world, their liquidity and utility will be trending towards its intrinsic value, which is virtually nothing.

PG View: When the media talks about cryptocurrencies they invariably use an image like the one above to make it seem tangible, but it is not. More often than not they represent the cryptocurrency as a gold coin. It is most certainly not gold.

“Money is gold, and nothing else.” -J.P. Morgan

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Gold is up this year not just in dollars but in every major currency

Why it’s important to the typical gold investor

by Michael J. Kosares
Author: The ABCs of Gold Investing
Founder: USAGOLD

“Even those of us who have been tracking gold’s progress for decades frequently give in to the ease of quoting gold’s value in terms of fiat currency – most commonly in US dollars. And yet, we have it the wrong way round. Gold is in fact the centre of the economic universe, and all the fiat currencies (including cryptocurrencies) revolve around gold.” – Jeff Thomas, InternationalMan.com

Most gold investors are aware that major national currencies have been in an uptrend against the dollar since the beginning of the year. What might be surprising is the degree they are up against the dollar. Here is the scorecard:

Euro –– +10.3%
Japanese yen –– + 4.2%
Chinese yuan –– + 4.5%
Swiss franc –– + 5.1%
British pound –– + 8.9%
Australian dollar –– + 9.0%
Canadian dollar –– + 7.2%
(As of 9/27/2017)

Even more surprising is the degree to which gold has strengthened against those same currencies. Here is that scorecard:

Euro –– + 1.1%
Japanese yen –– + 8.0%
Chinese yuan –– + 6.5%
Swiss franc –– + 6.1%
British pound –– + 3.4%
Australian dollar –– + 2.1%
Canadian dollar –– + 3.2%
U.S. dollar –– + 11.5%
(As of 9/27/2017. See charts below.)

Gold and the dollar are often referred to as safe havens in the same breath, but what these numbers tell us is that – at least for now – gold increasingly has become the safe haven of choice. It is too early to know whether or not the across-the-board uptrend in gold will continue, but it is worth noting and monitoring. Clearly, significant capital is finding its way to the gold market globally and we suspect that institutional investors and funds have played the dominant role.

Why is gold’s appreciation against domestic national currencies important to the individual American gold investor?

It identifies an important trend in gold ownership taking hold in the top economies around the world – a developing investor mindset and response to host country monetary policies that could be of immense importance going forward. It is revealing that the same phenomenon has taken root concurrently in all eight of the countries represented by the currencies listed above.

The pattern reflects concern about central banks’ ability to lift local economies out of a persistent disinflationary malaise. It also suggests that for many investors gold, not the U.S. dollar, looks to be the safer and more productive alternative should things take a turn for the worse.

As long as the low interest rate environment and concerns about overvaluation in the stock and bond markets persist, asset managers and investors are likely to continue shifting resources to underpriced gold (and silver). Given forward guidance provided by the central banks, it appears those policies and concerns will be with us for years to come.

Thus far, gold’s performance against major currencies has flown under the radar in financial circles and outside the notice of the mainstream media. That is not likely to remain the case for long.


In the October issue of News & Views, we pick up where this article leaves off with a very important companion piece: How Professional Investors Radically Altered the Gold Market.  We also explore what has brought the Old Guard back into the precious metals market.  Last, we include a CLIENT SPECIAL ADVISORY in conjunction with the 20th anniversary of The ABCs of Gold Investing.
We invite you to sign-up for our free monthly newsletter with appreciation to our current and prospective clientele. Immediate access to this month’s edition.

Charts courtesy of Gold Charts$Us/Nick Laird.  With thanks.
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Gold sideways today, but up in Asian market

Late Report

Gold tracked sideways all day today with little to mention in the way of news or unusual trading activity.  Silver followed suit.  In Asia, however, both metals have registered a pulse.  Gold is up $2.60 at $1275.35 as this is posted.  Silver is up 7¢ at $16.72.

Quote of the Day
“Time is the soul of money, the long-view — its immortality. Hard assets are forever, even when destroyed by the cataclysms of history. It is the outlook that perpetuated the most competent and powerful aristocracies in continental Europe, well up through World War I and, in certain prominent cases, beyond; it is the mindset that has sustained the most fiscally serious democratic republic in the Western world, that of Switzerland. . .” – Marcia Christoff-Kurapovna, the Mises Institute

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September’s final numbers not as bad as some would have us believe

LATE REPORT

Gold finished the day down $8.94 at $1270.70.  Silver was down 8¢ at $16.55. The final numbers on the week and the month ending 9/29 are not as bad as some would have us believe:

Gold
Week:  Down $30.83 at $1279.70 [- 2.4%]
Month:  Down $ $41.51 at $1279.70 [- 3.1%]

Silver
Week:  Down 52¢ at $16.63 [- 3.0%]
Month:  Down 92¢ at $16.63 [- 5.2%]

Blame for the downside has been cast wide and far, but in the end, the corrections in both metals had more to do with profit-taking and a little piling-on here and there from the short side of the market than much else.  In keeping with that analysis, the CFTC reports in its Commitment of Traders report that large speculators cut their positions by a little over 10% last week. Over the past two weeks, large specs have cut their positions by about 20% following eight successive weeks of gains.

We should keep in mind that gold and silver registered their highs for the year at the beginning of the month before turning south.  The metals are trading sideways in Asia as this is posted.

Quote of the day
“Central banks must feel like they have stepped through a mirror, and who can blame them? They used to struggle to bring inflation down or keep it under control; now they toil to push it up. They used to fear wage increases; now they urge them on . They used to dread fiscal expansion; now they sometimes invoke it. Fighting inflation defined a generation of postwar central bankers; encouraging it could define the current one.

What is going on in this topsy-turvy world? Could it be that inflation is like a compass with a broken needle? That would be a dreadful prospect – central bankers’ worst nightmare. And what would be the broader implications for central banking?” – Claudio Borio, chief economist,  the Bank for International Settlements


In the October issue of News & Views, we explore how professional investors radically altered the gold market, why gold is up in every major currency and  what has brought the Old Guard back into the precious metals market.

We invite you to sign-up for our free monthly newsletter with appreciation to our current and prospective clientele. Immediate access to this month’s edition.


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Gold lifts itself from the canvas today, posts a gain

LATE REPORT

Gold lifted itself from the canvas today settling $5 higher at $1287.00 and up $10.50 from its intra-day bottom at $1276.50.  Silver was 4¢ higher at $12.83. Gold has spent most of September tracking to the downside from its $1356 high for the year posted at the beginning of the month.

More proof of professional investors buying the dip surfaced today when Lipper, the fund research firm, reported that precious metals commodity funds took in $977 million over the past week, their highest level of capital investment since July, 2016.  Gold ETFs also reflect investors buying on the correction. By contrast, Lipper reported, stock mutual funds and ETFs suffered almost $10 billion in withdrawals.

Quote of the Day
“In an interview with Bloomberg, [World Gold Council’s Randall] Oliphant cited global political risks as impacting supply, yet countered that robust purchases from India and China should keep demand high. This, in his view, should push prices to as high as $1,400 an ounce in the near term and to record highs in the medium term. For context, gold peaked at an intraday high of just over $1,927 an ounce back in September 2011, and I would presume the “medium term” suggests a price target within the next two to five years, although Oliphant didn’t specify.”


News & Views – Forecasts, Commentary & Analysis on the Economy and Precious Metals
In-depth, cutting-edge coverage of the gold and silver markets for nearly 30 years. Valued for their insight, accuracy and reliability, our publications are linked and reprinted by a large number of websites both in the United States and around the globe.

We invite you to sign-up for our free newsletter available with appreciation to our current and prospective clientele. Immediate access to the September issue.  Access to the October issue will arrive by e-mail early next week.  It covers some interesting terrain.


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Gold continued its downtrend today

LATE REPORT

Gold continued its downtrend today shedding another $11.34 and finishing at $1282.61.  Silver held its own losing only 4¢ and finishing the day at $16.73.  Both metals are trading quietly early in Asian markets.  Both yesterday and today, gold spiked lower at precisely midnight ET.  The Japanese yen and Chinese yuan both chased gold lower oddly at the exact same time.  The whole move had the look of structured trading, but there is no way to verify the cause of the triple declines, i.e., the yen, the yuan and gold. Scroll down for a chart depicting the event, and we will leave it to you  to make your own call. . . . .

Quote of the Day
“[Y]ou can’t afford to try to time the market. What you have to do is study the long term elements, and you have to have a diversification plan that protects you when you’re wrong.” – Tony Robbins


Recent BBB client review
(One of 35 five star reviews published at the BBB website)

A trusted friend referred me to USAGOLD. As a novice, I was interested in their offer to teach. I got a good education. USAGOLD can be taken at their word, as good as gold – as the apt saying goes – a reliable, honest company. Comparing major online dealers often, still surprised what USAGOLD’s competitors do – higher prices, gimmicky products, odd procedures. . . I went slow and got it right, avoiding unaffordable mistakes. USAGOLD’s website, methods, and 4 Staff members on the phone with me – all models of clarity. I recommend USAGOLD continuing as a satisfied, now smarter, customer.” – M. Norman


 

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The Daily Market Report: Gold Pressured as Market Adjusts to Rate Hike Expectations


USAGOLD/Peter Grant/09-27-17

Gold extended to the downside in early, establishing new 5-week lows as the dollar continued to rebound amid heightened rate hike expectations for December. The yellow metal subsequently garnered some support after more disappointing housing market data.

U.S. NAR pending home sales sank 2.6% in August. Low supplies have sapped momentum from the market and the NAR’s chief economist concedes that the the housing market has essentially stalled. Housing makes up nearly a fifth of GDP, but drives an even larger segment of consumption (think furniture, appliances, law care products etc.).

If Janet Yellen really believes gradual rate hikes are still appropriate, think about the implications for the already slowing housing market. Higher mortgage rates, higher carry rates on construction and bridges loans are unlikely to reinvigorate this critical segment of the economy. Such policy is also unlikely to stoke the inflation that the Fed so desperately wants.

Currently the market believes the odds for a December rate hike are about 80%, based on Yellen’s comments yesterday. However, the Fed is still very much data dependent and I imagine the probability will be pared in the weeks ahead if incoming data disappoint.

If that is indeed how things unfold, the dominant downtrend in the dollar should re-exert itself, providing support for gold in the process. Certainly any escalation of the tensions with North Korea will provide an underpinning for the yellow metal as well.

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Attacks on gold past two days. . .

OPINION

. . . began at 10:00 pm Mountain Time both days with both the yen and gold dropping significantly, as shown in the first chart, a yen/gold overlay. Keep in mind that the yen is quoted in yen per dollar – a rising trend line coincides with a drop in the yen’s value against the dollar.  This looks like algo-based program trading, or some other planned intervention, designed to bring about an intended result. It is occurring long after the COMEX close and well before its open and during Tokyo trading hours while the TOCOM is open.

The second chart on the Chinese yuan shows a similar predisposition.  Keep in mind that China recently gave tacit permission to offshore traders to short the yuan. (Wall Street Journal article “China Acts to Cool Resurgent Yuan” – 9/11/2017) Once again, the yuan is quoted yuan/dollar so the chart appears inverse. In both instances, yesterday and today, the yuan was appreciating at 22:00 then suddenly turned around.   – MK

 

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Gold surrenders yesterday’s gains

LATE REPORT

Gold surrendered today most of the gains it picked-up yesterday and more. It was down $16.50 on the day at $1293.95.  Silver was down 38¢ at $16.77.  In early Asia trading, both metals are trading sideways to up marginally.  Gold’s decline began in the overnight market and continued steadily through the day. The main culprit could simply be ordinary profit taking and re-positioning at the higher prices.

Quote of the day
“Even those of us who have been tracking gold’s progress for decades frequently give in to the ease of quoting gold’s value in terms of fiat currency – most commonly in US dollars. And yet, we have it the wrong way round. Gold is in fact the centre of the economic universe, and all the fiat currencies (including cryptocurrencies) revolve around gold.” – Jeff Thomas, International Man.com


If you are a chart enthusiast, we have a couple pages at the USAGOLD website worth bookmarking. These charts are presented in conjunction with the St. Louis Federal Reserve (FRED) and update automatically through the magic of the internet. Both pages are handy references used often to settle after-dinner disputes among family members about the direction of the economy. [smile]

Gold trends and indicators in chart form

Monetary trends and indicators in chart form


 

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Gold vaults higher, up $13.50 – 1.5% on the day

LATE REPORT

Gold vaulted higher at today’s open and stayed at elevated levels throughout the day.  The precious metal was up almost $13.50 (+1.5%) on the day at $1310.53.  Silver followed suit up 18¢ (+1.7%) on the day at $17.15.  The strong, sudden spike at the open coincided with remarks from North Korea’s foreign minister Ho that the “United States declared war on our country.” Both metals are up marginally in Asia as this report is posted.

Here’s what today’s action looks like on a chart.  Both metals are represented:

For greater detail, please scroll below. . . .

Quote of the day
“Well, first of all, the best way to structure a portfolio is to have the right kind of balance in your portfolio, and some amount of gold. Gold serves a purpose. It is first of all, a diversifier against other assets. You know, we have this risk on, risk off thing. We also have a monetary system. The Bretton Woods monetary system began after World War II, and it had the dollar as the world’s reserve currency. There’s a risk there. There’s a lot of dollar denominated debt and so on. If somebody felt they didn’t want to hold that, and so you could have exposures to that.” – Ray Dalio, Bridgewater Associates [9/22/2017]


If you are new to the USAGOLD website, we invite you to kick back and stay awhile. Do a little interest-driven browsing. We launched this website in 1997 and it has dutifully been providing guidance and market information to investors ever since.

One of the most highly referenced and visited web portals in the gold business, this website goes deep. People are often surprised just how deep it goes. As a launchpad, we offer a quick website tour that hits the high points and suggests links, but it’s the depth, practicality and ease of use that will keep you coming back. WELCOME!


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Gold pushes back over $1300 mark, up $9 on day

North Korea’s Foreign Minister Ri says:

“North Korea has the right to shoot down U.S. warplanes as part of its right to self-defense under the United Nations charter. . . All options are on the table for North Korean response…The whole world should clearly remember it was the US who first declared war on our country.” (As reported by Reuters)

USAGOLD note: Move sudden.  Not sure if North Korea inspired or something else going on.  We will report back when we know more.

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Mass psychology supports the pricey stock market

Robert Schiller/New York Times/9-15-2017

“The C.A.P.E. ratio is above 30 today, compared with an average of 16.8 since 1881. It has been above 30 in only two other periods: in 1929, when it reached 33, and between 1997 and 2002, when it soared as high as 44.”

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Gold finishes the day up $6, but down $23 on the week

LATE REPORT

Gold finished up today to end a difficult week. On the day gold was up $6 at $1297.15; silver was up 5¢ at $16.97. On the week, gold finished down 1.7% (- $22.93); silver was down 3.4% (- 59¢).  It is the second week in a row gold and silver finished on the downside. The precious metals are being pushed in one direction by the increasingly dangerous threats from North Korea, and the other by concerns about Fed policy.

In the meantime, disinflation reigns and with it the ever-present financial system risks globally – a prospect elevating physical demand. As reported earlier today, gold ETFs inventories have risen this week as prices have fallen – an indication of professional money buying the dip.

Asia is closed.  Stay tuned.  We might put up a post or two over the weekend if anything interesting surfaces.  Have a pleasant weekend.

We invite  you to scroll – a useful review of the week’s events from a golden perspective awaits . . . .


In the upcoming issue of our monthly newsletter, we tell a forgotten story about the currency markets. Hint:  Gold is the hero of this tale and it provides clues as to where we might be headed in the future. We also offer a tribute to the 300th anniversary of Sir Isaac Newton’s inadvertent discovery of the gold standard. Mercifully, we are going to try avoid commentary on the Federal Reserve.

We invite you to sign-up for our free monthly newsletter with appreciation to our current and prospective clientele.


 

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OPINION: Hamilton on quantitative tightening’s impact on stocks, gold

GoldSeek/Adam Hamilton/9-22-2017

“Don’t let the complacent stock-market reaction this week fool you, quantitative tightening is a huge deal. It’s the biggest market game-changer by far since QE’s dawn! Starting to reverse QE via QT radically alters market dynamics going forward. Like a freight train just starting to move, it doesn’t look scary to traders yet. But once that QT train gets barreling at full speed, it’s going to be a havoc-wreaking juggernaut.”

USAGOLD Note:  Adam Hamilton, an old friend from our early days on the internet, often finds himself ahead of the crowd.  One sentence in his latest caught our eye:  “Just hearing a hurricane is coming is radically different than actually living through one.”  I would add a thought to the quote just above in conjunction with the hurricane analogy:  Markets have been known to anticipate just like some people will anticipate and prepare for a hurricane.  It might not take the juggernaut moving at full speed to move pricing in stocks, bonds, gold and silver. In this scenario, professional investors and hedge funds will  likely lead the way, and that is where most of the pricing power resides. . . . .

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Morning Snapshot: Gold, silver sideways this morning

The precious metals are moving sideways this morning – nothing new to report.  We refer you to last night’s LATE REPORT for our latest update on the current market.

More later if anything interesting develops. . . .Have a good day.

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Will silver outperform gold in the months ahead?

Lawrie Williams/SharpsPixley/9-15-2017

“Our long expressed view is that the GSR [gold-silver ratio) will revert back to the 65 level or below – how soon this will happen we are not sure.  However at $1,400 gold, which we see as a possibility even this year, a GSR of 65 would mean a silver price of around $21.50 – a rise of over 20% from where it is now.  That doesn’t look to be an unreasonable target, although it may take longer than four months to get there.”

USAGOLD note:  We note an interesting phenomena of late.  The old guard is back in the market at these prices and one of their interests is to balance their gold holdings with silver.  In the past most of these investors were purely gold buyers and had never owned silver before.  Now, they want to own silver for the upside potential, but they also see it as a safe-haven.  This group tends to stick with the American Eagle one-once silver bullion coin pictured above.

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James Rickard on the Fed’s asset reduction program

Daily Reckoning/James Rickards/9-21-2017

“The Fed wants you to think that QT (Quantitative Tightening) will not have any impact. Fed leadership speaks in code and has a word for this which you’ll hear called ‘background.’ The Fed wants this to run on background. Think of running on background like someone using a computer to access email while downloading something on background.

This is complete nonsense. They’ve spent eight years saying that quantitative easing was stimulative. Now they want the public to believe that a change to quantitative tightening is not going to slow the economy.

They continue to push that conditions are sustainable when printing money, but when they make money disappear, it will not have any impact. This approach falls down on its face — and it will have a big impact.”

USAGOLD note:  As we mentioned in a previous report, we are in an economy deeply mired in disinflation with deflation knocking quietly on the door. The markets are wary.  Investors are still buying gold.  The SPDR gold ETF  total gold weight was up 199,539 ounces yesterday to 27,400,195 ounces, or .7%.  Over the past four weeks it is up 5.84%.

During the whole period, the investment business had a pretty good idea what the Fed would announce.  Keep in mind that the gold ETFs are dominated by professional investors.  They know disinflation is ingrained in this economy and they are buying for defensive, safe-haven purposes, i.e., as a disinflation hedge. The following chart covers holdings in all the ETFs Aug 22 thru yesterday – an interesting buy-the-dip divergence.


Chart courtesy of GoldChartsRUs
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Gold staging recovery in Asia trading

LATE REPORT

Gold is staging something of minor recovery in the overnight Asia market – up $4.00 at $1296.00 from earlier closing levels and about $6 from the $1288 low posted in intraday trading.  Silver is tagging along for the ride – up about 6¢ at $17.04 from closing levels and 20¢ from intra-day lows at $6.84.  Reports have surfaced tonight that North Korea’s Minister of Foreign Affairs threatened test detonation of a hydrogen bomb in the Pacific Ocean.

More later if warranted. To catch up on today’s action, please scroll further down the page. . . . .

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Morning Snapshot: Gold stays on downside track

Gold remains on a downside track this morning.  It broke the $1300 barrier in Asian overnight trading, continued down in Europe before leveling out, at least temporarily, in early U.S. trading.  From noon MT yesterday when the Fed published its announcement, gold is down $22 at $1292.00. Silver over the same time frame is down 40¢ at $16.98.  On the day thus far gold is down about $7 and silver 14¢ from yesterday’s closing levels.

The reaction to the Fed’s interest rate and asset reduction program has been tepid across the markets with only short-term U.S. Treasuries a beneficiary.

 

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USAGOLD’s September Gold Buyers’ Special

SPECIAL OFFER PAGE/Historic British sovereigns

“It is estimated that only 1% of all gold sovereigns that have ever been minted are still in collectible condition. It is this relative rarity in relation to bullion coins and bars that leads to leverage whereby, in gold bull markets, the value of these coins increases by more that the actual price of gold.” – Money Week, “Why you should buy gold sovereigns”


We have placed hundreds of thousands of historic British sovereigns with our clientele, but never at a premium this low. . .9% over the melt value.  Modern American Eagles in the one-quarter ounce size fetch a higher premium . . .10.5%.  We only have a thousand  at that price and, as always it’s first-come, first-served. We are also offering at attractive pricing 500 King George V sovereigns in brilliant uncirculated state of preservation – the “collectible condition” referenced in the Money Week quote above.

Those of you who have participated in these specials in the past know how quickly we can sell out, especially when it is a price-based offer.

USAGOLD Order Desk
1-800-869-5115
Extension #100
or
orderdesk@usagold.com


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S&P cuts China’s credit rating, says rising debt is stoking economic, financial risks

Reuters /Jason Lee/0-21-2017

“S&P Global Ratings downgraded China’s long-term sovereign credit rating on Thursday, less than a month ahead of one of the country’s most sensitive political gatherings, citing increasing risks from its rapid build-up of debt. S&P’s one-notch downgrade to A+ from AA- comes as Beijing grapples with the challenges of containing financial risks stemming from years of credit-fueled stimulus needed to meet ambitious government economic growth targets.”

USAGOLD note:  Gold demand within China hardly needs a boost but this news will provide it nevertheless.  This announcement came after Asian markets closed.

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Fed, Bank of Japan policy divergence

Bloomberg/Lorcan Roche Kelly/9-21-2017

“Overnight, the Bank of Japan kept monetary policy unchanged, with a surprise dovish dissent in the 8-1 vote as newly-appointed Goushi Kataoka said that policy needed to be more accommodative to reach the bank’s inflation target by 2019. The divergence between the Fed and the BOJ pushed the yen lower, with the currency trading at 112.40 per dollar. . .”

USAGOLD note:  The yen started the year at 115 and it’s now trading at 112.4, so it is actually up against the dollar on the year. When you zoom out from the day to day noise, the reality comes into focus.

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