Gold stubbornly holding its ground, Mint shuts down silver American Eagle production
(USAGOLD – February 26, 2019) – Gold is stubbornly holding its ground just below the $1300 level this morning – down $1.50 at $1326. Silver is down 2¢ at $15.88. Technical factors are keeping the downside at bay for gold while uncertainty about the outcome on a bevy of economic and geopolitical concerns keep a check on the upside. The markets at this juncture, including gold, would be best described as taking a wait and see approach though that might not last. Fed chairman Powell will testify before Congress today. The Trump-Kim summit in Viet Nam begins tomorrow. The United States Mint surprised the gold and silver markets once again with another shutdown of silver American Eagle production late last week – a problem that seems to occur whenever we get a ramp-up in investor demand. We have options expiration today on the COMEX February contract for both gold and silver, so we could see more downside as the trading session progresses.
Quote of the Day
“While there will always be some standouts, it’s not clear why so many managers can claim sustained superior performance. The basic technology, data and expertise is readily available. Logically, the anomalies that the strategies rely on should dissipate. There is an inherent contradiction in that the approach exploits inefficiencies, but requires market efficiency to realign prices to generate returns. The reality is that any fund managers possessing a magic investment formula guaranteeing low risk and high returns would have no incentive to share the secret. Successful firms such as Renaissance Technologies LLC have closed some funds to outside investors, preferring to capture the returns for themselves. As legendary investor Paul Tudor Jones once noted, if there was a single easy formula to follow, then all investors would already be rich.” – Satyajit Das, Bloomberg opinion columnist
Chart of the Day
Chart courtesy of World Gold CouncilHUB
Chart note: “Tactically,” says the World Gold Council, “gold presents an interesting opportunity. Gold speculative positioning in futures markets remains low by historical standards. While CME-managed money net long positions increased in December 2018, they were at record lows, since data was first broken down by investor type in 2006, earlier in the year. Net combined speculative positions, which go back further, were at their lowest for the first time since December 2001. And in recent years, a large increase in short positions has been followed by a sharp rally in gold as we started to witness towards the end of 2018.”