Gold sinks to 2018 lows

AFTERNOON UPDATE

FOREX Closes: Gold $1242.31 (-$10.60 / Silver $15.86 (-20¢)

MarketWatch/Myra P. Saefong and Koning Beals/7-1-2018

“’The excuse for gold being down so much starts with the dollar, but I suspect there are some gold bulls throwing in the towel, which may be exacerbating gold’s weakness,’ said Michael Armbruster, managing partner at Altavest. Even so, he said he ‘would not be surprised to see a big gold rally in the near future’—possibly a gain of $50 an ounce.”

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DMR–Gold retreats on euro weakness, German government instability

Gold retreated further in early trading today on concerns about stability in Germany’s government that sent the euro into a tailspin. Simultaneously, the yuan is down sharply against the dollar.  Analysts are uncertain if the yuan downside is part of a Chinese attempt to devalue or natural market forces at work. The dollar consequently spiked higher – dragging gold lower.  It is down $8.50 on the day at $1244.50.  Silver is down 25¢ at $15.88.

The downdrafts in the euro and yuan overshadowed a sharp drop in Asian stock markets overnight and a weak open for Wall Street that might otherwise have been a positive influence on precious metals prices.  Oil appears to be taking a breather today despite Saudi Arabia’s break with the Trump administration on production increases. Much appears to be up in the air as we begin the day, the week and the month. . . .

Quote of the Day
“A common feature of all these earlier troubles was that, having happened, they were over. The worst was reasonably recognizable as such. The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to ensure that as few as possible escaped the common misfortune. The fortunate speculator who had funds to answer the first margin call presently got another and equally urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost. The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. (Not only were a record 12,894,650 shares sold on 24 October; precisely the same number were bought.) The bargains then suffered a ruinous fall. Even the man who waited out all of October and all of November, who saw the volume of trading return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next twenty-four months. The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable.” – John Kenneth Galbraith, The Great Crash: 1929

Chart of the Day

Chart courtesy of Palisade Research/Adem Tumerkan

Chart note:  As Palisade Research’s Adem Tumerkan says in the article accompanying this chart, “Take advantage of the low-implied volatility the market is pricing in while ignoring the smart money rotating out of equities. The Smart Money knows that all this ‘peace’ will be followed by spurts of high turbulence – eventually. During this period of mispriced risk, complacent markets, and false confidence – be long anything with positive optionality.” Tumerkan, according to his Seeking Alpha disclosure statement, is a gold owner.

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Is the small investor always wrong?

Wealth Management.com/Brad Zigler/7-2-2018

“We find the correlations strong enough to allow the use of DSI [Daily Sentiment Index] as a leading indicator and as a timing tool,’ [Jake] Bernstein declares. He’s quick to point out that DSI isn’t the end-all, be-all of market indicators. ‘DSI is not perfect. However, it does have immense value as a warning system. Perfect or not, the DSI for gold has been sounding a klaxon for more than a month. Small traders have turned bearish on bullion in a big way. Just look at the DSI’s three-day moving average in the chart below. It submerged below 25 in early May and has been under water ever since.”

USAGOLD note: This is an interesting observation and indicator from Jake Bernstein.  For months we have been following the consistent global involvement in the gold market among funds and institutions  as buyers and wondered why private investors remained on the sidelines. Underneath it all, in our estimation, the chief driving factor to the complacency is not so much that the public is bearish on bullion. It is more the belief that modern trading systems will allow a quick exit from the stock market when that particular klaxon rings (as in, for example, a 1987-style market crash). . . . . and an equally quick entrance into the gold market.

Investors should consider that they may be able to get out of stocks, but at what price? And that they might be able to get into gold and silver, but once again – at what price? Modern online trading systems might end up working just fine, but the offered bid and ask prices might be something else again. Back offices will adjust quickly to failing market conditions. The institutions and funds through long experience are well aware of how quickly bids can drop during a general market breakdown and are planning accordingly.  The public, for better or worse, is oblivious putting their faith in technologies that in the end will fundamentally still mirror market conditions. . . .and in a New York nanosecond.

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Asian stocks close sharply lower as China losses weigh on markets; wave of tariffs on the horizon

CNBC/Cheang Ming/7-2-2018

“Major Asian markets closed sharply lower on Monday, the first trading day of the second half of the year, as heavy losses were recorded in China ahead of a looming deadline when tariffs from both Washington and Beijing are expected to take effect.”

USAGOLD note: The selling in European stock markets was not as pronounced.  Wall Street looks to open down about 130 as this posted. “Hostile trade talk” blamed.

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Huge equity funds outflow has awkward echoes of 1998 Asian crisis

Financial Times/Chris Flood/6-30-2018

“Increasing concern about the effect of a possible trade war between the US and China has forced investors in equity funds to head for the exits. Investors pulled $29.7bn from equity funds in the week ended June 27, the second largest weekly outflow since the beginning of the millennium, according to data provider EPFR.”

 USAGOLD note:  A warning shot across the bow of global stock and bond markets?

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Germany’s Weidmann says next ECB boss must be able to tighten money taps

Reuters/Francesco Canepa, Frank Siebelt and Thomas Escritt/7-1-2018

“The next head of the European Central Bank must be someone who can tighten the money taps after years of crisis-fighting and stimulus, the head of the Bundesbank Jens Weidmann said in a radio interview on Sunday.”

USAGOLD note:  Two thoughts.  First, Weidmann’s comments represent an undertow within the ECB favoring a tighter monetary policy.  That said, these comments alone are not likely to have a profound effect on the euro-dollar rate.  Second, Weidmann is generally considered the odds-on favorite to replace Mario Draghi in late 2019, so his views carry considerable weight.

 

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EU warns of $300bn hit to US over car import tariffs

Financial Times/Jim Brunsden/7-1-2018

“Donald Trump’s threat to hit car imports with punitive tariffs risks sparking global retaliation against as much as $300bn of US products, Brussels has warned.”

USAGOLD note: It does not appear that Trump has any notion of backing down.  He told Fox News today that “The European Union is possibly as bad as China, just smaller.”  U.S.-imposed auto-tariffs appear closer to certainty by each passing day.

 

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Gold steadies, may have bottomed

AFTERNOON UPDATE

FOREX Closes: Gold $1252.91 (+$4.82) / Silver $16.06 (+9¢)

London South East/Alliance News/6-29-2018

“Gold futures rose Friday, snapping a four-day losing skid as traders weighed a flurry of economic news from around the globe. After hitting a 7-month low, gold for August rose USD3.60 to USD1254.60 an ounce.”

 

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Visualizations offered in conjunction with the Visual Capitalist 2018-2

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Surging oil prices send eurozone inflation above ECB target

Financial Times/Claire Jones/6-29-2018

“The surge in the price of oil has pushed eurozone inflation above the European Central Bank’s target, but policymakers in Frankfurt are expected to ignore the rise as broader price pressures across the region remain weak.”

USAGOLD note:  It is interesting to note that both the United States and Europe reported inflation numbers above target based on surging oil prices.  Brent crude is surging again today – up $1.61 at $79.40 and  in a solid uptrend for the past year that the gold market has ignored.

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China’s yuan tumble blindsides traders, spurs worry over impact

Bloomberg/Tian Chen, Eric Lamm and Anooja Debnath/6-27-2018

“Global investors might shrug at a bear market in Chinese domestic stocks — largely walled off from the rest of the world. But a tumble in the yuan that’s blindsided currency forecasters is now triggering warnings of potential contagion.”

USAGOLD note:  This article is worth reading for the comments from front-line currency traders in the trade wars.

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DMR–A sliver of light today at the end of the tunnel

DAILY MARKET REPORT

A tiny sliver of light flickered at the end of the tunnel this morning with gold bumping $2.50 higher at $1251.50. A slight improvement in China’s yuan was a help as was Europe’s coming to an agreement on immigration policy – an outcome that sent the euro higher on international markets.

The PCE Index, the Fed’s favorite inflation indicator, also offered a glimmer of hope by rising 2.3% (yoy) in May and exceeding the central bank’s 2% target level for the first time in six years. Chairman Powell mentioned recently interest rate policies would not be thrown off course if inflation were to exceed the target level, so the effect on gold and the dollar are likely to be limited in the short term.

Over the longer term though if inflation expectations begin to gather some momentum, current prices might attract some fresh buying in the gold market. MineLife’s Gavin Wendt summed it up this way for Bloomberg this morning, “The U.S. dollar has been the biggest beneficiary as investors’ first choice safe haven. This has indirectly led to gold-price weakness, as the dollar and gold typically move inversely to each other. With the emergence of inflation, gold is likely to find a bottom, as the dollar’s gains weaken.”

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

Chart of the Day

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

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Tehran bazaar protests point to Iranian power struggle

Financial Times/Najmeh Bozorgmehr/6-26-2018

“Hundreds of merchants in the vaulted streets of Tehran’s Grand Bazaar have shut down their shops this week in protests against a sliding currency that allies of Hassan Rouhani, Iran’s centrist president, say are being whipped up by hardliners to push him out of office.”

USAGOLD note:  This article cites one shopkeeper as saying that “people buy only basic commodities these days or turn their savings into gold coins.”  We draw your attention to this situation in Iran only because it is symptomatic of what might happen around the world should the emerging countries’ debt and currency crisis accelerate. Iran and Turkey, another country where heavy gold coin has been reported in the face of a currency crisis, are two among dozens of similarly situated countries. With the sheer number of countries and people potentially involved, the demand for physical gold could actually accelerate to levels that it would move the price.

 

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Global stocks see biggest loss of investor cash since the financial crisis

CNBC/Jeff Cox/6-28-2018

“Investors pulled $12.4 billion from global stock-focused funds in June, the highest level since October 2008 amid the worst of the financial crisis. A slowing global economy is spooking some investors as are fears of a trade war.”

USAGOLD note: Part of the capital flight problem we keep alluding to in this on-going commentary. . . . . .The dominoes not only represent one country potentially affecting another, but the problems within individual countries where the problem rolls over from its stock market, to its currency and to its external debt denominated in U.S. dollars. . .and so on.

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Powell wants ‘real economy’ to guide Fed

Bloomberg/Craig Torres, Jeanna Smialek and Christopher Condon/6-28-2018

“Fed chair’s style is more like Greenspan than Bernanke, Yellen. Fed policy may be more nimble, but a little less predictable. . . For Powell, the first non-economist to hold the job in more than three decades, conceptual benchmarks can’t fully describe the complexity of the U.S. economy. So in this first five months, he’s brought a subtle but important change to the chairmanship at a key juncture in the business cycle: trust evidence as much as economic models.”

USAGOLD note:  An important departure from past Fed chairs. . . .It will also make his tenure more interesting for those of us who spend a lot of time attempting to figure out just what the central banks – and most importantly, the Fed – are up to.

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Gold prices mark fourth decline for longest losing streak in nearly 5 months

AFTERNOON UPDATE

FOREX Closes: Gold $1248.50 (-$4.87) / Silver $16.05 (-12¢)

MarketWatch/Myra Saefong and Mark DeCambre/6-28-2018

“Gold futures finish lower Thursday to suffer a fourth consecutive loss, as the precious metal continued to be walloped by recent momentum in the U.S. dollar. . . ‘The gold market has a feeling of being oversold, but persistent strong U.S. dollar is keeping a lid on any modest recovery rally in face of ‘so-so;’ economic news’ Thursday, which should have been support for the precious metal, said Jeff Wright, executive vice president at GoldMining Inc.”

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Bloomberg’s guide to what the world’s top central banks will do next

Bloomberg/Staff/6-28-2018

“What policy makers do next in 2018 is sure to be a driver for financial markets, long supported by the flood of cheap cash.”

USAGOLD note:  A helpful summation of central bank policies that includes opinion from Bloomberg economists on each country’s policy stance.  In these times of uncoordinated, if not competitive, central bank policies, this article provides an overview worth reviewing. We should keep in mind though that whatever the policy today, it could change in a hurry. . . especially in these internationally unpredictable and acrimonious times.

 

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DMR–Gold nudges lower as dollar seesaws and problems mount in Europe and China

Gold nudged slightly lower again today as the U.S. dollar seesawed in international markets. It dipped briefly below the $1250 mark overnight and is now trading at $1252.50, down 75¢ on the day.  Silver is trading at $16.00, off 12¢ on the day. If gold finishes lower again today, it will be the fourth day in a row it has lost ground.

With the immigration problem in Europe threatening Angel Merkel’s German government and the trade wars doing damage to China’s stock market and currency, the dollar at the moment is the chief beneficiary of safe-haven capital flow. That could all come to a screeching halt though if the Trump administration were to suddenly decide that the strong dollar is undermining its trade policies.  Conversely, China and Europe might decide that a stronger euro and yuan might be in their best interest. We invite you to scroll below for details.

Quote of the Day
“Monetary units have always been closely tied up with units of weight. For instance, the word ‘pound’ has been used to describe both the British monetary unit (£) and the weight (lb). The pound weight was originally based on wheat. In 1266, King Henry III decreed that the British unit referred to as the grain should be defined as the weight of a corn of wheat ‘well dried, and gathered out of the middle of the ear.’ Thirty-two grains were to be equal to a pennyweight, twenty pennyweights equal to an ounce, and twelve ounces added up to a pound. So the early English pound, otherwise known as the Tower pound, was comprised of 7,680 ‘well-dried’ grains from the middle of an ear of wheat.” – JP Koning, Bullion Star

Chart of the Day

Chart courtesy of TradingEconomics.com

Chart note: China’s Shanghai Composite Index dropped another 27 points overnight to close at 2786.  It is down about 9% since the January interim top at the 3550 level as part of downtrend in what some analysts have dubbed a bear market for Chinese stocks.  A report from the National Institute for Finance and Development, a China government-sponsored think tank, warned yesterday that “. . .China is currently very likely to see a financial panic. Preventing its occurrence and spread should be the top priority for our financial and macroeconomic regulators over the next few years.” The report was published on the internet then subsequently removed.  As reported here yesterday, China intervened in currency markets on Wednesday to slow the fall of the yuan but met with limited success.  The currency was down sharply again today in Asian trading.

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Will the full moon mark a turning point for gold and silver?

Streetwise Reports/Bob Moriarity/6-27-2018

“I read something from Tom [McClellan] a couple of years ago that for certain falls in the Voodoo category. He had heard that there was a relationship between the full moon and turns in the price of gold. He set out to disprove that theory and utterly failed in his attempt. To his very great surprise, there was a relationship on a regular basis. Either the price would accelerate in the direction it had been going or it would do a U-turn.”

Recommended:  321Gold/Bob Moriarity’s website.

USAGOLD note:  Today, June 28th, we have a full moon.

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Money supply growth slides again, falling to 3-month low

Mises Institute/Ryan McMaken/6-27-2018

“Money supply growth fell to a three-month low in May this year, continuing a general downward slide in growth rates that’s been in place since late 2016. . .The money-supply metric used here — an Austrian or “true” money supply measure — is the metric developed by Murray Rothbard and Joseph Salerno, and is designed to provide a better measure than M2. The Mises Institute now offers regular updates on this metric and its growth.”

USAGOLD note:  We have registered our concern in the past about raising rates into an environment of diminishing money supply. “What should we take away from this?” asks McMaken. “Falling growth rates — not necessarily into negative territory — often precede economic crises.” If you haven’t gone already, a visit to the Mises Institute site is highly recommended.

 

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Weak dollar policy and commodities

RealInvestmentAdvice/Michael Lebowitz/6-27-2018

“Trump’s campaign promised fair trade and a resurgence in U.S. manufacturing. While there are many ways he may accomplish this task, the most expeditious would be a weak dollar policy. As we have seen, negotiations can be tricky, complex and time-consuming. With a mid-term election in a few months and the 2020 presidential campaign commencing shortly thereafter, the President’s patience may wear thin. If Trump were to effectively implement a weak dollar policy, the benefits he promised voters are more likely to be apparent, even if they are only cosmetic. Investors can prepare for currency depreciation, which is frequently the expedient and often the preferred tactic of politicians.”

USAGOLD note:  Lebowitz concludes that gold is “the best hedge against a weaker dollar.”  We agree with him that the president’s patience might wear thin with the strengthening dollar.  We have expressed as much in various reports here at USAGOLD.  We should not forget that the president has frequently registered his unhappiness with China and Japan’s weak currency policies.  This is not a president who is unaware of the problem.

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Better Business Bureau Five Star Review

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Recent Better Business Bureau Client Review

“When I first became interested in purchasing gold, I merely followed the advertising recommendation of a conservative national personality. This experience was not favorable, as the recommended firm seemed to be just another high pressure marketing boiler room, only interested in making a sale at the highest possible commission. Of course I was disenchanted, and thus lumped (unfairly) all gold brokers into the same category.

A few years later, my interest in purchasing gold overcame my earlier experience and I began seeking a trustworthy firm. As I researched various options, USAGOLD caught my attention. After a few weeks of following their website presence (the Live Daily Newsletter and their weekly video), I began a telephonic dialog with Jonathan Kosares. Recognizing that I was a novice, Jonathan patiently provided general precious metals background and technical information, while also directing me to various educational resources. Since I sought a long term relationship with a stable firm, and because of my earlier experience purchasing gold, my next step was to schedule a personal visit to USAGOLD’s offices in Denver. The meeting at USAGOLD was quite comforting and further instilled a deep sense of trust. . . All that I encountered underscored and reinforced USAGOLD’s unique history and competency with regard to gold and precious metals.

Over the next few months, I engaged in several significant transactions, and all aspects of those transactions could not have been better. I could not have been more pleased with the specific recommendations and pricing, strategies related to IRA/HSA alternatives, balancing exposures to both gold and silver, and the execution of shipping and delivery. I intend to be a lifelong customer, and to this day Jonathan is always available to share his knowledge of precious metals and his perspective on the markets. If you are looking for personal attention from a trustworthy firm that has decades of impeccable history along with a focused depth of expertise, you have found it in USAGOLD.” – R.N., 1/29/2017

Scorecard: 38 45  47 five star reviews. Zero complaints.
A+ rating. Accredited since 1991.

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

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Why Russia and Turkey are such gold bugs

Bloomberg/Leonid Bershidsky/6-27-2018

“It’s not a given that the world will keep buying U.S. debt at the same levels regardless of American policies and the shifting perceptions of U.S. political and economic power. The Russian and Turkish flight into gold could be a precursor of bigger global shifts.”

USAGOLD note:  We should keep in mind that Russia is light gold when its reserves are measured against other major players on the world stage, but it is making some solid progress toward remedying that problem. Germany, the Netherlands, Austria, Belgium, Venezuela, and maybe some others that have done so very quietly, repatriated their gold with essentially the same logic in mind. Likewise, the total lack of official sector sales from major countries is governed by the same logic.  Central banks own gold for the very same reasons private investors do.

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Gold marks third straight decline and another 6-month low

AFTERNOON UPDATE

FOREX Closes: Gold $1252.05 (-$6.77) / Silver $16.06 (-20¢)

MarketWatch/Mark DeCambre and Myra P. Saefong/6-27-2018

“The skid for bullion has come even as intensifying jitters around global trade, and the potential for clashes between the U.S. and its partners in China and the Europe, have elevated worries that tit-for-tat import duties will devolve into an all-out trade war, disrupting international economies.”

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Investors losing faith in global economic upswing

Financial Times/Kate Allen/6-27-2018

“Investors’ confidence in the global economic upswing is fading but this has not yet fed through into their expectations for financial assets, according to new research.”

USAGOLD note:  What me worry?  There is a clause in the new social contract which reads that the stock market will not be allowed to fail under any circumstances.  Just ask the Trump administration. . . .That clause has been included in past contracts, but for some inexplicable reason the market failed anyway – 1929, 1937, 1962, 1970s, 1987, 1990, 2000, 2007.  Some have been worse than others, but some analysts are saying now the next correction is likely to be the Big One – that we should circle 1929.

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DMR–Gold off this morning, not much in the way of news

Gold is off another $2.50 this morning at $1256.00 in a minor continuation of yesterday’s downtrend.  Silver is down 8¢ at $16.21.  Nothing new has surfaced in the way of market-altering news.  Gold seems to be looking for direction in early trading. We will keep the DMR short today as there isn’t much to report, and point you immediately below for a couple quick, but interesting reads.

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

Charts[s] of the Day

Chart courtesy of TradingEconomics.com

Chart note: Though China might be tempted to choose devaluation over selling U.S. debt as a tactic in the trade war, as Goldman Sach’s economists suggested yesterday, it creates other problems for the country that it has tried to avoid in the past – most notably capital flight.  The fact of the matter is that China has chosen to do just the opposite since early 2014: It has sold U.S. debt and tried to keep the yuan in a tight band against the U.S. dollar. China’s foreign exchange reserves as a result went from nearly $4 trillion to just above $3 trillion.  Meanwhile, the yuan has traded in a narrow channel between 14¢ and 16¢.  Noted gold analyst, Martin Murenbeeld, in fact, recently suggested that the trade war would inevitably force the U.S. to devalue the dollar. (Please scroll below) Also, the Wall Street Journal reports this morning that today “China’s central bank appeared to intervene to stem the yuan’s decline.”

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Blue Line Research’s Bill Baruch sees gold at $1300 in 30-60 days

Bloomberg/Futures in Focus/6-26-2018

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Dollar devaluation against gold inevitable – Murenbeeld

TRADE WARS

Sharps Pixley/Lawrie Williams/6-26-2018

“‘Students of monetary history should recall that global growth shrank  in the wake of the Smoot-Hawley Tariff Act of 1930, and the US was forced to devalue the dollar against gold in January 1934 with the result that the gold price rose by 70% (from $20.67 to $35.00).’   He goes on to say that, under the current Trump policy, the dollar will inevitably have to be devalued as these tariffs and counter tariffs are followed through to their inevitable conclusion.  A trade war tends to have no winners.”

USAGOLD note:  Murenbeeld’s thinking goes along with our own contention posted previously that the Trump administration is unlikely to stand idly by while other nation states launch competitive devaluation policies that would nullify the effect of tariffs. Any de facto devaluation of the dollar, no matter the mechanisms applied to carry it out, would probably push up the price of gold.

 

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Standard Charter’s Suki Cooper sees gold support at $1250

Bloomberg/Markets/6-25-2018 (Video interview)

USAGOLD note:  $1250 is long-standing support level.

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Gold hits more than 6-month low as dollar, equities recover

AFTERNOON UPDATE

FOREX Closes: Gold $1258.82 (-$6.58) / Silver $16.26 (-3¢)

Reuters/Maytaal Angel/6-26-2018

“Gold hit its lowest in more than six months on Tuesday as a sell off in global risk assets eased and the precious metal remained under pressure from the prospect that rising U.S. interest rates will further support the dollar.”

USAGOLD note:  Also, today was options expiration day on the July COMEX contract, as reported in this morning’s DMR further down the page.

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