Commerzbank sees major rally in gold, $1500 in 2019

Scrap Register/8-27-2018

“‘In our view, gold has fallen too far,’ Commerzbank said. ‘The current price hardly reflects the numerous political and economic uncertainties prevailing. The record level of speculative net short positions suggests a substantial price rally before the end of the year. Given the lower starting point, we are lowering our forecast for year-end to $1,300 per troy ounce. We still expect the price to rise in 2019 to $1,500.’”

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India silver imports continue at explosive pace through June

Smaulgld/Louis Cammarosano/8-27-2018

“While the Indian government’s anti-gold initiatives have dented official gold demand in India, black market sales and imports continue. Silver has been a direct beneficiary of the campaign against gold. Indians prize silver for its beauty and also give it as gifts. It’s not substitute for gold, but it is viewed favorably.”

USAGOLD note:  As this article indicates, surging demand for gold and silver in India usually indicates a bottom.  It is also worth filing for future reference that India’s people “prize silver.”  That attachment could accrue as a positive for the fundamentals in the years to come.

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King Ibn Saud’s 35,000 British sovereign gold coins

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Saudi Arabia’s 1933 sale of oil concessions for gold

“In August, 2018 those same sovereigns would bring a little less than $10 million at melt value ($282.50 each/$1200 per ounce gold price) and a barrel of oil is selling for about $75. Thus, a British sovereign today can buy less than four barrels of oil — a statistic that gives you an inkling of gold’s current under-valuation.  For gold to buy the same amount of oil now that it did in 1933, the metal would have to go to $3186 per ounce.”

For the full story

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Why the gold ETF is the wrong vehicle for serious, long-term investors

Elliott Wave Trader.net/Avi Gilburt/Audio-Video

“Stay away from the ETFs. . . I’m hoping to give you some taste at least of how toxic these funds are and should not be seriously considered as long-term investment vehicles.”

USAGOLD note:  This 12-minute video is well-worth the time spent listening to it, particularly if you want to own gold and silver for safe-haven purposes.  The ETF, for the reasons Avi Gilburt outlines, is not the way to do it.  He describes in some detail the inherent dangers of owning gold and silver through ETF shares, and the full audio/video is highly recommended.  The best way to own precious metals is the old tried and true approach – physical bars and coins in your possession.  Gilburt, by the way, is not just an expert on Elliott Wave analysis, he is also an attorney.

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DMR-Gold up $6 in continuation of trend begun on Friday

Gold pushed another $6 higher at $1212 in a continuation of the upward trend begun on Friday.  Overseas trading was quiet.  Silver is up 10¢ at $14.89. Gold is up $27 since last Thursday’s close.  As we reported last week, the market is being driven by a combination of three major developments – dovish remarks from the Fed chairman in a speech delivered on Friday, China’s moves to strengthen the yuan, and the perceived potential for short covering from speculators squaring the record short position at the COMEX (if not actual covering).  The dollar is down sharply in early trading.

Quote of the Day
“President Trump’s actions over trade, which appear to have some short-term successes, are driving countries away from her sphere of influence. Ultimately this will prove counterproductive. Speculators buying into Trump’s short-termism and the Fed’s normalization policies are for the moment driving the dollar higher, without realizing that foreigners, far from suffering from a shortage of dollars, already own all the excess dollar liquidity created since the Lehman crisis. This seems certain to lead to the dollar’s downfall. Therefore, the dollar is rising only on short-term considerations, driven by nothing more substantial than speculative flows.

Once these abate, the longer-term prospects for the dollar will reassert themselves, including the escalating budget and trade deficits, record levels of foreign ownership of the dollar, and rising prices fueled by a combination of earlier monetary expansion and the extra taxes of trade tariffs. And if that’s not enough, the erosion of its hegemony coupled with China’s future demands for infrastructure capital seem bound to lead to a fundamental reallocation of capital to the detriment of the dollar. No wonder China and Russia decided to corner the market for physical gold.” – Alasdair Macleod, Mises Institute

Chart[s] of the Day

Charts note:  The last time we featured these two charts, it was to illustrate the relationship between gold and the yuan as they moved in tandem to the downside.  Late last week we caught a glimpse of the other side of the story – the upside. In Friday’s DMR we made note of the possibility that China might have an interest in demonstrating its desire to keep the yuan from plummeting to a disastrously low level.  Though we emphasized trade negotiations with the United States as one incentive, there is another driver to  Chinese policy that may be even more important over the longer run and the one with staying power. China also has an interest in controlling, even stopping, capital flight.  China’s oft-state goal, we should remember, is to position the yuan as a competitor to the dollar for global reserve currency status.  As a result the aspirations of the yuan might also become support for the price of gold.

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New platinum-gold alloy most wear-resistant in the world

Materials Today/8-27-2018

“Materials scientists at Sandia National Laboratories have engineered a platinum-gold alloy believed to be the most wear-resistant metal in the world. It’s 100 times more durable than high-strength steel, making it the first alloy in the same class as diamond and sapphire, nature’s most wear-resistant materials.”

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Fed officials see consumer costs as tariffs bite

Financial Times/Sam Fleming/8-26-2018

“Moves by US companies to shift the cost of President Donald Trump’s tariffs to their customers risk complicating monetary policy decisions as the Federal Reserve seeks to keep inflation steady, the central bank’s policymakers have warned.”

USAGOLD note:  More anectodal evidence of future inflation. . .

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Powell’s homage to Greenspan hints at Fed flashback

Bloomberg, 8-24-2018/Daniel Moss/8-24-2018

“It’s been a long time since Alan Greenspan gave the big speech at Jackson Hole. And yet there he was, almost ubiquitous, in the ideas and words of Federal Reserve Chairman Jerome Powell’s speech at the central bank’s retreat in Wyoming. Powell heaped praise on Greenspan’s insight as chairman in the 1990s, perceiving that something that changed in the economy and that the old links between strong growth, a vibrant labor market and inflation had broken down. Rates didn’t have to increase as much as conventional wisdom at the time held that they should.”

USAGOLD note:  Bloomberg highlights what many perceive as the Fed chairman taking a dovish turn in his speech Friday at the Jackson Hole central banker conclave. This article summarizes Powell’s emphasis on not being too fast or too slow on the monetary policy trigger, but a more or less a take it as it comes approach.

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Maund: Precious metals’ COTs, sentiment super bullish as Fed set to reverse course

Gold Eagle/Clive Maund/8-26-2018

“We are now seeing an overwhelming body of evidence coming together to suggest that gold and silver have hit bottom. And that even if they haven’t, the bottom is very close as downside risk is very limited. On a more mundane level, the drop in gold and silver prices in the recent past is pushing many mines to the brink of becoming economic at a time of an impending supply crunch, a situation that must soon lead to higher prices. Whilst we were premature in calling a bottom earlier this year, it really does look like the time has come to ‘back up the truck’ for reasons that we will now set out as briefly and succinctly as possible.”

 

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PBoC joins forces with Powell to hit brakes on dollar rally

Bloomberg/Katherine Greifeld/8-24-2018

“The People’s Bank of China and Federal Reserve delivered a one-two punch to the dollar Friday, spurring the biggest selloff in a month and raising the specter of further weakness ahead.”

USAGOLD note:  For those who do not follow this sort of thing closely, the PBoC sets a benchmark rate daily for the yuan as priced in U.S. dollars.  It then allows a 2% fluctuation in the yuan’s value thereafter intervening if necessary to enforce its wishes. Expressing its intent as it did on Friday to resume using a “counter-cyclical” factor when pricing the yuan, China’s central bank sent a message to speculators that it does not want excessive volatility in the yuan market.  Some analysts saw the PBoC’s policy announcement as one of the factors behind gold’s sharp rise on Friday.

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Gold Trading Hours

Whenever the gold market gets active, we have a large increase in visitors at our Gold Trading Hours page.  Investors want to see which markets – Asian, European or American – are the focal point for price movement.  They also want to know when a particular market is going to open or close in areas where gold might experience an influx of buyer or seller interest.  That is why we designed this popular page with market hours and a live clock showing the local time in that particular market and all the other major gold markets.  Gold Trading Hours is one of the quiet pages at USAGOLD that garners significant global interest particularly when the market is moving or breaking news warrants more than average interest. We also invite you to return here regularly – to this Live Daily Newsletter page – for up-to-the-minute gold market news, opinion and analysis as it happens.

We invite your visit.  We encourage your bookmark.

USAGOLD’s
Gold Trading Hours
London – New York – Sydney – Hong Kong – Shanghai – Tokyo – Zurich


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DMR–Gold higher third day in a row, market setting up for ‘dramatic short covering rally’

Gold is down $3 at $1208 – with nothing of earth-shaking importance having developed overnight or early in the New York market session.  Aiding gold, China’s yuan is showing some strength today, as is the yen, while the rest of the currencies seem to be carried in their wake.  Silver is down 5¢ thus far at $14.85.  Commenting on the record short positions in the gold and silver commodities markets, Tocqueville’s John Hathaway concludes that “The current futures market structure appears to be a set up for a dramatic short covering rally that will end up in losses for speculative shorts.”

Quote of the Day
“Speculators in gold price futures are short 670 tonnes – the biggest bearish position in 25 years. . .ANZ analysts Daniel Hynes and Soni Kumari say in the past, ‘such extreme levels of short positions have led to a rally in prices: 1999, short positions rose fivefold to hit a then record level of 80,000 contracts. Not long after, gold prices rallied 16% from USD250/oz to USD290/oz over the course of two months. Short positions spiked again in July 2005 and January 2016, with gold prices rallying 12% and 14% respectively over the subsequent three months. In both these cases, the net long position was extremely close to being negative. This raises the spectre of investors closing out their record level of short positions, and thus starting a short covering rally.” – Frik Els, Mining.com

Chart of the Day

Chart note:  While commodities have held their own during this stage of the trade wars, gold has declined dramatically by comparison – a break in the long-term pattern of the two moving in the same direction. Some believe gold could play catch-up as we move into the last third of the year. Much of the downside for gold has been the result of the short position built to record levels on the commodities exchange – a position that will need to be covered in order for the speculators to claim their gains. In the past, as Frik Els points out in our Quote of the Day, covering those short positions has led to price rallies in 1999, 2005 and 2016. We might add there was a less pronounced example of short-covering in 2017 as well.

 

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DMR–Gold up sharply on dovish Fed rumblings and dollar intervention speculation, possible short covering

Gold moved sharply to the upside this morning in response to dovish rumblings in financial media on the Fed chairman’s speech later in the day, a higher yuan and speculation about intervention to weaken the dollar.  The metal is up $12 on the day thus far at $1197 and pushing toward the $1200 mark.  Silver is up 22¢ at $14.76.  Also, not to be ruled out, this morning’s rally is reminiscent of last Friday’s – a price surge we thought might be related to short-covering.

The commodities complex as a whole is pushing higher led by oil, gasoline and copper.  Given the generally negative breakdown in China-U.S. talks, what the Wall Street Journal described as ending with a “thud”, the commodities rally begs explanation. Meanwhile, the notion that the White House might intervene in currency markets to weaken the dollar gained additional credence via a major Bloomberg article this morning. “A deliberate move to weaken the dollar isn’t far fetched anymore,” said the news service.

Added note:  The Wall Street Journal this morning reported a senior official as stating that “To get a positive result from these engagements, the Chinese must address the issues raised by the U.S.”  Perhaps, downward manipulation of the yuan was one of those issues.  Are the gold and currency markets reading the pullback in the yuan overnight as an attempt by China to send a message?  Could be.

We will update later in the day if any fresh news becomes available.

Quote of the Day
“It was significant that we didn’t see any bears at either venue despite doing a 7.30am, 13 mile valley floor hike! I’m sure the absence of fellow bears was a significant countertrend sign. I learned something else on my trip worth sharing. We took the Yosemite Tram tour of the valley floor and the ranger gave a very interesting talk about fire. Until 1970 Yosemite Parks was extinguishing regular small-scale fires to prevent property damage. The resultant rise in dense small tree growth meant that although fires were less frequent, they quickly got out of control. Since 1970 they have allowed more fires to burn, resulting in less damage. . . It is therefore reasonable to argue that the US has already faced a ‘normal’ tightening cycle and any additional rate hikes are taking us into territory not seen in recent times. This already may be enough for the Fed to have broken something.” – Albert Edwards, Society Generale

Chart note: This chart shows the gains or losses in gold from the same month a year earlier. Since the Fed began raising interest rates in early 2016, gold has gone higher in 22 out of the past 30 months. That means that you could have purchased gold in any one of those months a year earlier and showed a gain 12 months later, and sometimes that gain was significant – as much as 10% to 22%! 

 

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Flash Special!

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While they last
For those who think we might have hit bottom

70  Gold Canadian Maple Leaf (1 tr oz)

–– At 2% (!) over melt first-come, first-served ––

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The gold price and the big short

Mining.com/Frik Els/8-23-2018

“Speculators in gold price futures are short 670 tonnes – the biggest bearish position in 25 years. . .ANZ analysts Daniel Hynes and Soni Kumari say in the past, ‘such extreme levels of short positions have led to a rally in prices: 1999, short positions rose fivefold to hit a then record level of 80,000 contracts. Not long after, gold prices rallied 16% from USD250/oz to USD290/oz over the course of two months. Short positions spiked again in July 2005 and January 2016, with gold prices rallying 12% and 14% respectively over the subsequent three months. In both these cases, the net long position was extremely close to being negative. This raises the spectre of investors closing out their record level of short positions, and thus starting a short covering rally.”

USAGOLD note:  This analysis will sound familiar to our regular readers. We post it as further support for our own views on the record short position at the COMEX.

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U.S.-China talks draw a blank, bringing fresh tariffs into view

Bloomberg/Shawn Donnan, Mark Niquette and Miao Han/8-24-2018

“The trade war between the U.S. and China is primed to escalate after their governments failed to make progress in two days of talks. The two sides had met with low expectations for this week’s meetings and no further talks had been scheduled, a person familiar with the discussions said. The person, who requested anonymity to discuss the private deliberations, also said Chinese officials had raised the possibility that no further negotiations could happen until after November’s mid-term elections in the U.S.”

USAGOLD note:  In a break with past responses to negative U.S.-China trade war news, the yuan is up sharply this morning.

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Powell’s big Jackson Hole speech could have a dovish surprise

CNBC/Patti Domm/8-23-2018

“Trump was not chiding the Federal Reserve for the first time, but his most recent tirade triggered an uproar, both for the unorthodox nature of the remarks from a president and the appearance that he was meddling with the Fed’s independence. But he also hit on the very thought at the top of mind for many a market pro right now — is the Fed going too fast and could it pause?”

USAGOLD opinion:  Powell has made a dovish comment or two over the past few months that largely escaped interpretation as such.  When he talks about an “asymmetric” rate policy, for example, it might be interpreted as keeping the interest rate below the inflation rate thus promoting a negative real rate of return.  That in itself is inflationary, but the markets have ignored the overture.  “I think his comments are important. They’re taking the tack that at the moment, ‘our policy has to stay pristine and independent from political interference,’ but the other thing is, what if he’s [i.e., the president] right?” said [Mitsubishi Financial Group’s Chris] Rupkey. “What if rates are having a harmful effect on the prospects for growth here.” Too, there is the overall effect of Fed policies on third world countries and, in conjunction with that, big banks in the developed economies.

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What soyabeans teach us about tariffs

Financial Times/Gillian Tett/8-23-2018

“The soya saga is just a taste of what could happen if trade wars disrupt other supply chains.”

USAGOLD note: At the moment, there’s more to the soybean than tofu and healthy snacks.  It’s what tariffs on the bean can tell us about the larger trade wars that is significant.  From one of our favorite writers at FT. . . . . . .

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DMR–Gold backs off from gains earlier in the week, generally quiet day so far

DAILY MARKET REPORT

Gold backed off a bit today from gains earlier in the week responding to a combination of interest rate concerns and renewed trade war tensions.  The metal dipped as low as $1187 during Asian trading hours then recovered to trade in the $1192 range as New York opened – down $3 on the day.  Silver is down 9¢ on the day at $14.67.  Without much to report, we will sign off for now and update at the live newsletter page if anything interesting develops during the course of the day.

Quote[s] of the Day
Central bankers are coy about gold’s importance as a monetary metal. Former Fed Chair Benjamin Bernanke, at one of our hearings, claimed flatly that gold was not money. When I pressed Bernanke on why, then, do central banks hold gold, he declared that after a long pause that it was merely ‘tradition.’ He had no interest in my suggestion that the gold could be sold off to the American people if it’s not money. The point is that due to today’s impending crisis, many governments are now accumulating more gold—while others are holding onto what they have with the expectation it will once again be used in the monetary system.” – Ron Paul, former Congressman and presidential candidate [Emphasis added]

“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).” – Martin Murenbeeld, Gold Monitor newsletter

Chart of the Day

Chart note: This chart demonstrates gold’s strong performance as a portfolio holding over a long period of time. It depicts the average annual price of gold since 1970. It dispels the notion that gold is somehow volatile or unpredictable and as a result unreliable as a long-term portfolio safe haven. To the contrary, it shows gold living up to its reputation as precisely the opposite – stable in the face of rapidly changing economic circumstances, predictable in that it reacts directly to those circumstances and reliable in that has performed as advertised over an extended period of time – the extent of the fiat money era that began in 1971.

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Longest bull market in history is cracking as ‘artificial support’ fades, David Rosenberg warns

CNBC/Stephanie Landsman/8-23-2018

“David Rosenberg sees cracks in the longest bull market ever. The Gluskin Sheff chief economist and strategist blames the record run’s ‘artificial support,’ citing the boost stock and credit markets have been receiving from central banks around the world. But now, he predicts it could all come crumbling down as easy money policies fade.”

USAGOLD note:  Something Wall Street doesn’t want to hear from one of its most highly respected analysts.

 

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A gold bloc for Iran, Russia and Turkey. . . Oh My!

Forbes/Steve Hanke/8-22-2018

“In 1997, Bob Mundell predicted that ‘Gold will be part of the structure of the international monetary system in the twenty-first century.’ As has often been the case, Mundell’s prediction might just be prescient. Indeed, Iran, Russia, and Turkey could, and just might, make Mundell’s prediction a reality. One foolproof way to do that is via gold-based currency boards. Currency boards have existed in more than 70 countries, and a number are in operation today. Countries with such monetary institutions have experienced more fiscal discipline, superior price stability, and higher growth rates than comparable countries with central banks.”

USAGOLD note:  Interesting speculation from John Hopkins economist, Steve Hanke.  His advice on gold-based currency boards can be applied in any emerging country as a counterweight to over-reliance on the dollar and dollar-based debt and currency reserves, not just the one’s mentioned.

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America is overdue for another economic disaster

National  Review/George Will/8-19-2018

“The durable market rise that began March 6, 2009, is as intoxicating as the Lehman anniversary should be sobering: Nothing lasts. Those who see no Lehman-like episode on the horizon did not see the last one.”

USAGOLD note:  This time around no one can claim that they weren’t warned or that they didn’t see it coming as was universally the case in 2008.  Now  the warnings come almost daily.

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The ‘National Emergency Loophole’: How Trump could intervene in the market to crush the dollar

ZeroHedge/Capitalist Exploits blog/8-22-2018

“Here is why [Nomura’s Richard] Koo is confident that it is only a matter of time before Trump directly intervenes in the FX market:

‘A protectionist policy that must be individually tailored to each product category requires large numbers of administrative staff, and a period must be established during which companies can apply for exemptions. Exchange rate-based adjustments, on the other hand, entail no such costs. In that sense, the more problematic administrative delays become and the more industry opposition mounts, the greater the likelihood that President Trump will replace tariffs with exchange rates as his main tool for addressing US trade imbalances.’

The loudest warning to date that Trump could rock the currency world has come from Charles Dallara, the former U.S. Treasury official who was one of the architects of the Plaza Accord, the 1985 agreement between the U.S. and four other countries to jointly depreciate the dollar. ‘The trade debate will increasingly include the currency issues,’ he told Bloomberg ‘It’s inevitable.'”

USAGOLD note: This article tells how the White House could offset the Fed’s interest rate policies in terms of their effect on the trade wars and the strong dollar.  An intervention like what is discussed at the link above, in our estimation, would have a major impact on the gold market.

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DMR–Gold even on the day, speculation about Fed-White House split overhangs markets

DAILY MARKET REPORT

Gold pushed briefly over the$1200 mark in late European trading today on concerns of renewed trade tensions – this time between the United States and the European Union – and continued firming of China’s yuan.  As we go to fetch this report to the server, gold is even on the day and trading at the $1296 mark.  Silver is down 4¢ at $14.76.

The most pressing issue in the gold market, though, is not the value of the dollar or the trade wars, but the one situation that underlies both – the determinations of the Federal Reserve on interest rate increases and the president’s remarks late last week. Though many expect something of relevance to occur at Jackson Hole, we are in the camp that thinks nothing much will happen there and that the Fed chairman’s speech will be significantly less than controversial. The Fed-White House split and the speculation about who will win out is likely to hang over all the markets, including gold, for some time to come.

Quote of the Day
“Why does the cycle move as it does? What causes these periodic alternations, this ebb and this flow, in the national priorities?  If it is a genuine cycle, the explanation must be primarily internal. Each phase must flow out of the conditions – and contradictions – of the phase before and then itself prepare the way for the next recurrence. A true cycle is self-generating. It cannot be determined, short of catastrophe, by external events. Wars, depressions, inflations may heighten or complicate moods, but the cycle itself rolls on, self-contained, self-sufficient and autonomous. . .The roots of cyclical self sufficiency lies deep in the natural life of humanity. There is a cyclical pattern in organic nature — in the tides, in the seasons, in night and day, in the systole and diastole of the human heart.” – Arthur M. Schlesinger, Jr., The Cycles of American History

Chart of the Day

Chart  note:  As the chart above illustrates, gold does not always react to the start of a crisis as anticipated. As the credit crisis gained momentum in 2008, gold declined as the dollar rose – acting in much the same way it is reacting now to the emerging markets crisis and U.S.-China trade war. It was not until late 2008, when the full extent of the crisis became all too apparent, that it began to move higher. Thereafter, from 2009 to September 2011, it rose to its all-time high of $1895 – a 215% gain in three years.

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Chinese ETF investors throw gold a lifeline

Bloomberg/Luzi-Ann Javier/8-20-2018

“Just when you thought investors have given up on gold, the Chinese swooped in….Bullion has been shunned by American speculators recently, with money managers boosting their net-short position to a record for a fourth straight week. As a stronger dollar and prospects for rising interest rates turn off U.S. buyers, the trend is turning halfway around the world. Chinese investors are picking up bargains in gold as the yuan weakens, while the Shanghai Composite Index slipped last week to its lowest close since 2016.”

USAGOLD note:  Traditionally, China buys a falling market and America, except for those who like to run ahead of the crowd, buys a rising market.  This is an interesting article highlighting strong gold demand from Chinese investors concerned about the country’s economy and under-performing equity markets.

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Adrian Day: Take advantage of gold’s capitulation to buy

Streetwise Reports/Adrian Day/8-21-2018

“If this is the main cause of gold’s sharp decline in the last week or so, then it is of necessity a temporary phenomenon. The U.S. economy, stocks and the dollar may stay reasonably strong—for now at any rate—so gold won’t suddenly explode upwards, but we could reasonably expect a near-term return above $1,200 towards the mid-$1,200s. (On Friday, gold bounced $11 from its low of $1,174.)”

USAGOLD note:  As of this morning gold is up $26 from its $1174 low last Thursday.

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Trump: We are going to put a 25% tariff on every car from the European Union

CNBC/Mike Calia/8-21-2018

“‘We’re going to put a 25 percent tax on every car that comes into the United States from the European Union,’ Trump said at a campaign rally in West Virginia.”

USAGOLD note:  So much for the cooling of trade tensions with Europe. . . . .

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Fed chief navigates treacherous political and economic waters

Financial Times/Sam Fleming/8-21-2018

“On the surface, the economic backdrop to Jay Powell’s first Jackson Hole address as Federal Reserve chairman could hardly look much more benign.”

USAGOLD note:  It is what’s running below that placid surface that has the financial markets’ attention.  My guess is that Friday’s speech will be a carefully-crafted tightrope walk of the kind to which we have become accustomed from Fed chairs. The president, for his part, has vowed to not go quietly into the good night on interest rates. . . . . . . .

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Afternoon Update

(USAGOLD – August 21, 2018) – As we suggested might be the case in this morning’s DMR, gold in fact did end up going positive today finishing at $1196.30 – up $4.60 on the day.  An appreciating yuan was the key factor. A stronger Japanese yen helped matters.  Also helping gold today were reports that Russia had added 800,000 ounces of gold to its reserves in July.  That puts Russia’s total gold reserve at just under 2000 tonnes – the fifth largest in the world. Gold is now up $20 from its $1174 low last Thursday.

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Hedging financial warfare

A new and important reason for physical gold and silver ownership (not ETFs)

Daily Reckoning/James Rickards/8-21-2018

“The result could be a market decline of 20% or more in a single day, comparable to the stock market crash of October 1987 or the crash of 1929. You would not have to trade anything or be in the market during the attack; you would be wiped out based on the market decline even if you did nothing.”

USAGOLD note:  This analysis from James Rickards, in our view, is his most important in a long time.  Financial warfare – the ability of America’s enemies to penetrate and disrupt markets and infrastructure through malware and other forms of electronic weaponry – is something few investors contemplate.  As Rickards, points out though, the threat is very real especially under the current tension-filled circumstances and prudent investors need to take it into account. “The key,” says Rickards, “is to have some portion of your total assets invested in nondigital assets that cannot be hacked, wiped out or disrupted in financial warfare. Such assets include gold, silver, land, fine art and private equity that is usually represented by a paper contract and does not rely on electronic exchange trading for liquidity.” This is the financial market equivalent of living off the grid. We strongly recommend reading and contemplating the article at the link.

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