Monthly Archives: March 2019

BIS intervention in the gold market

OPINION

KingWorldNews/Andrew Maguire/3-29-2019

“There were official interventions in the gold market this week. Why this week? Today was the day when the Bank for International Settlements’ (BIS) gold derivative bets had to be marked-to-market. With gold breaking out into the mid $1,320’s into the Comex options expiry on Tuesday and the concurrent over the counter mark-to-market sweet-spot for officials closer to $1,303, the BIS stepped in . . .”

USAGOLD note:  A very interesting take on what might have happened in the gold market late last week. . . . . .Maguire believes we have reached an impasse when monetary officialdom will require a higher gold price.

Posted in Today's top gold news and opinion |

Silver specs bullish positions rebound after 3 down weeks

Through Tuesday, March 26, 2019
Charts and commentary courtesy of CountingPips.com

Tables courtesy of GoldSeek

Note: Commitment of Traders reports are published Friday with data from the previous Tuesday.


Gold specs sharply raised bullish bets this week

 

Gold Non-Commercial Speculator Positions:

Large precious metals speculators strongly pushed their bullish net positions higher in the Gold futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of Gold futures, traded by large speculators and hedge funds, totaled a net position of 119,741 contracts in the data reported through Tuesday March 26th. This was a weekly gain of 31,345 net contracts from the previous week which had a total of 88,396 net contracts.

The week’s net position was the result of the gross bullish position (longs) growing by 10,122 contracts to a weekly total of 214,447 contracts that combined with the gross bearish position (shorts) which saw a reduction by -21,223 contracts for the week to a total of 94,706 contracts.

The gold net speculative position rose for a second straight week after dropping in the previous three weeks. The current standing is back over the +100,000 net contract level for the first time since February 26th and has now been in positive territory for nineteen consecutive weeks.

Gold Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -151,434 contracts on the week. This was a weekly fall of -35,775 contracts from the total net of -115,659 contracts reported the previous week.

Gold Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Gold Futures (Front Month) closed at approximately $1321.40 which was a boost of $14.90 from the previous close of $1306.50, according to unofficial market data.


Silver specs bullish positions rebound after 3 down weeks

 

Silver Non-Commercial Speculator Positions:

Large precious metals speculators increased their bullish net positions in the Silver futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of Silver futures, traded by large speculators and hedge funds, totaled a net position of 26,189 contracts in the data reported through Tuesday March 26th. This was a weekly increase of 2,879 net contracts from the previous week which had a total of 23,310 net contracts.

The week’s net position was the result of the gross bullish position (longs) increasing by 857 contracts to a weekly total of 76,053 contracts that combined with the gross bearish position (shorts) which saw a lowering by -2,022 contracts for the week to a total of 49,864 contracts.

Silver speculator bets rebounded this week after falling in the previous three weeks and for five out of the previous six weeks.

Despite the recent declines, the current spec standing remains in bullish territory for a sixteenth straight week and the bullish position has been above the +20,000 net contract level for the past fourteen weeks.

Silver Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -48,494 contracts on the week. This was a weekly drop of -4,794 contracts from the total net of -43,700 contracts reported the previous week.

Silver Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Silver Futures (Front Month) closed at approximately $1542.90 which was a boost of $5.70 from the previous close of $1537.20, according to unofficial market data.


US Dollar Index specs trim bullish bets for 2nd week

US Dollar Index Speculator Positions

Large currency speculators cut back on their net positions in the US Dollar Index futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of 25,285 contracts in the data reported through Tuesday March 26th. This was a weekly reduction of -650 contracts from the previous week which had a total of 25,935 net contracts.

This week’s net position was the result of the gross bullish position decreasing by -1,664 contracts to a weekly total of 36,943 contracts that combined with the gross bearish position total of 11,658 contracts which saw a lowering by -1,014 contracts for the week.

The net speculative position for the USD Index has now declined for a second straight week following a sharp drop in bets last week. The current standing remains a little above the +25,000 net contract level for a second straight week. The bullish spec position had been steady above +30,000 contracts for thirty-two straight weeks before last week’s drop off.


*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators). Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).
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Posted in COT Reports |

Short and Sweet

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The inflation-deflation debate

No one knows off which side of the tight wire—hyperinflation or deflationary crash—the economy will fall. Needless to say, neither proposition is very comforting from an investor’ point of view. Yet from the point of view of the gold investor, the inflation/deflation debate is purely academic. Gold will protect and preserve your assets in either instance. Gold is the time-honored, historically proven hedge against economic disasters of all descriptions. Both deflationists and inflationists recommend gold as the portfolio item to hedge against disaster. In a deflationary crash, gold becomes the only asset left standing after others are undermined by default. In an inflationary debacle, gold survives the erosion of the currency’s purchasing power and retains its value after all other assets are devalued. Hedge your portfolio with gold and leave the inflation-deflation argument to the economists.

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Posted in Short and Sweet | Tagged |

Gold in the Attic

Every once in a while we rummage around USAGOLD’s creaky old attic and dust-off a golden vignette from our storied past. The following vignette first appeared in our monthly client letter in April 2015. It is titled “Caveat Venditor” (Let the seller beware) and it tells why the prudent investor might think twice about parting with his or her gold even if a small investment had grown to be worth millions. Though hyperinflation, or inflation at any level,  seems a distant threat at the moment, this nugget of wisdom is one to file for future reference.

Caveat Venditor

Gillian Tett (Financial Times): “Do you think that gold is currently a good investment?”

Alan Greenspan (private citizen): “Yes. Remember what we’re looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.” – Council on Foreign Relations meeting, November, 2014

Let the seller beware! The German citizen/investor who put away a few rolls of 20 mark gold coins (.2304 tr ozs. shown below) in 1918 would have done so at 119 marks per ounce. By early 1920 the previous rapid inflation had suddenly German money given way to deflation. Had that gold owner decided to cash in on gold’s significant gains thinking runaway inflation was over, a 100,000 mark investment would have made him or her a millionaire.

The glow, however, would have quickly worn off. By late 1921 the runaway inflation had resurfaced but now with a vengeance. Gold shot to 4,000 marks per ounce. By mid-1922 gold reached 10,000 marks per ounce and the wholesale price index went from 13 to 70. By late 1922, the roof caved in. Gold traded at 134,000 marks per ounce. In January, 1923, it cracked 1,000,000 marks per ounce. By midyear, it broke the 100 million marks per ounce barrier and at the peak of the hyper-inflationary breakdown, it sold for over 100 billion marks per ounce.

The individual who thought he or she had the cat by the tail and cashed-in his or her golden chips during the 1920’s deflation became a millionaire. In short order though, that millionaire became a pauper as wave after wave of hyperinflation washed over the German economy. One moral from this somewhat frightening tale is that becoming a millionaire or even a billionaire on one’s gold holdings was inconsequential. Another is not to give up one’s hedge until there is ample evidence that it is no longer needed. Momentary nominal profits can be illusory.

Caveat venditor!


Trailer note – From The Nightmare German Inflation by Scientific Market Analysis: “Those who held funds in dollars, pounds or other stable currencies, or in gold, saved their capital. The government set up rigid exchange controls as the inflation proceeded. As usual under such conditions, a black market flourished. The ones who fared best were the small minority who had the foresight to exchange marks into foreign money or gold very early, before new laws made this difficult and before the mark lost too much value.”

The currency image (top left) illustrates the rapid depreciation in Germany’s paper money with single notes going from a 20 mark value in 1918 (the paper equivalent of one 20 mark gold coin) to a 20 million mark value in 1924. Fast forward to 2015, nearly one hundred years later, and we find that all currencies are being deliberately devalued against one another in an on-going global currency war. That hedge is no longer available. Only gold stands outside the fray. Perhaps that is why former Fed chairman Alan Greenspan recently said, “Remember what we’re looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.”

Posted in Gold in the Attic, Today's top gold news and opinion |

Gold specs lift bullish bets after three down weeks

Through Tuesday, March 19, 2019
Charts and commentary courtesy of CountingPips.com

Tables courtesy of GoldSeek

Note: Commitment of Traders reports are published Friday with data from the previous Tuesday.


Gold specs lift bullish bets after three down weeks

Gold Non-Commercial Speculator Positions:

Large precious metals speculators increased their bullish net positions in the Gold futures markets this week following a recent cool off in bets, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of Gold futures, traded by large speculators and hedge funds, totaled a net position of 88,396 contracts in the data reported through Tuesday March 19th. This was a weekly rise of 9,577 net contracts from the previous week which had a total of 78,819 net contracts.

The week’s net position was the result of the gross bullish position (longs) declining by -925 contracts to a weekly total of 204,325 contracts but was sharply overcome by the drop in the gross bearish position (shorts) which fell by -10,502 contracts for the week to a total of 115,929 contracts.

The net speculative position had fallen for three straight weeks and for four out of the previous five weeks before this week’s rebound. The gold position remains in bullish territory for the eighteenth straight week after a dip into negative territory in November.

Gold Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -115,659 contracts on the week. This was a weekly fall of -7,185 contracts from the total net of -108,474 contracts reported the previous week.

Gold Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Gold Futures (Front Month) closed at approximately $1306.50 which was a gain of $8.40 from the previous close of $1298.10, according to unofficial market data.


Silver specs cut back on bullish bets for 3rd week

Silver Non-Commercial Speculator Positions:

Large precious metals speculators reduced their bullish net positions in the Silver futures markets again this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of Silver futures, traded by large speculators and hedge funds, totaled a net position of 23,310 contracts in the data reported through Tuesday March 19th. This was a weekly lowering of -3,772 net contracts from the previous week which had a total of 27,082 net contracts.

The week’s net position was the result of the gross bullish position (longs) decreasing by -987 contracts to a weekly total of 75,196 contracts that combined with the gross bearish position (shorts) which saw a rise by 2,785 contracts for the week to a total of 51,886 contracts.

Speculator net positions have dipped for three straight weeks and are now down by -35,003 contracts over that period. The speculative position, with strong gains in January and February, streaked to its best level since November 2017 with bullish bets above +58,000 contracts on February 26th. The recent cool off in positions has brought the current standing to the lowest level in the past twelve weeks.

Silver Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -43,700 contracts on the week. This was a weekly increase of 2,561 contracts from the total net of -46,261 contracts reported the previous week.

Silver Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the Silver Futures (Front Month) closed at approximately $1537.20 which was a loss of $-4.10 from the previous close of $1541.30, according to unofficial market data.


Specs sharply dropped US Dollar Index bets

US Dollar Index Speculator Positions

Large currency speculators sharply reduced their bullish net positions in the US Dollar Index futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of US Dollar Index futures, traded by large speculators and hedge funds, totaled a net position of 25,935 contracts in the data reported through Tuesday March 19th. This was a weekly lowering of -9,139 contracts from the previous week which had a total of 35,074 net contracts.

This week’s net position was the result of the gross bullish position (the longs) tumbling by -6,423 contracts to a weekly total of 38,607 contracts combined with the gross bearish position (the shorts) total of 12,672 contracts which saw an increase by 2,716 contracts for the week.

The net speculative position had advanced for two straight weeks before this week’s decline which marks the largest weekly fall since June 20th of 2017 when the net position plunged by -22,405 contracts. Despite the speculator bet reductions, the dollar index level remains in a bullish position although under the +30,000 net contract level for the first time in thirty-three weeks.


*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators). Find CFTC criteria here:   (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).
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Posted in COT Reports |

Gold subdued today, looking for direction

(USAGOLD – March 21, 2019) – Gold is in a bit of a quandary this morning following the Fed’s surprise policy maneuvers yesterday. The response was strong out of the gate, but things cooled overnight and that subdued mood carried over to the New York open. Gold, as a result, is level on the day as is silver. We suspect that the markets are in for a re-calibration having its beginnings in countless strategy meetings in investment offices across the globe this morning. Most expected the Fed to be come out dovish after yesterday’s meeting. Few expected it to come out as dovish as it did. Though an easier monetary policy is welcome news among investors, the economic weakness it implies is not. It might take a day or two for the real reaction to find its way to the financial marketplace. We await that outcome. . . . .



Gone fishin’. . .
Back first week of April


Quote of the Day
“’The granaries in all the towns are brimming with reserves, and the coffers are full with treasures and gold, worth trillions,’ wrote Sima Qian, a Chinese historian living in the 1st century BC. ‘There is so much money that the ropes used to string coins together rot and break, an innumerable amount. The granaries in the capital overflow and the grain goes bad and cannot be eaten.’ He was describing the legendary surpluses of the Han dynasty, an age characterised by the first Chinese expansion to the west and south, and the establishment of trade routes later known as the Silk Road, which stretched from the old capital Xi’an as far as ancient Rome.” – Charles Clover and Lucy Hornby, Financial Times

Chart of the Day

Posted in dailyquotes |

Gone fishin’. . .


Back first week of April.


Posted in Announcements |

Gold subdued today, looking for direction

(USAGOLD – March 21, 2019) – Gold is in a bit of a quandary this morning following the Fed’s surprise policy maneuvers yesterday. The response was strong out of the gate, but things cooled overnight and that subdued mood carried over to the New York open. Gold, as a result, is level on the day as is silver. We suspect that the markets are in for a re-calibration having its beginnings in countless strategy meetings in investment offices across the globe this morning.  Most expected the Fed to be come out dovish after yesterday’s meeting.  Few expected it to come out as dovish as it did.  Though an easier monetary policy is welcome news among investors, the economic weakness it implies is not. It might take a day or two for the real reaction to find its way to the financial marketplace.  We await that outcome. . . . .

Quote of the Day
“’The granaries in all the towns are brimming with reserves, and the coffers are full with treasures and gold, worth trillions,’ wrote Sima Qian, a Chinese historian living in the 1st century BC. ‘There is so much money that the ropes used to string coins together rot and break, an innumerable amount. The granaries in the capital overflow and the grain goes bad and cannot be eaten.’ He was describing the legendary surpluses of the Han dynasty, an age characterised by the first Chinese expansion to the west and south, and the establishment of trade routes later known as the Silk Road, which stretched from the old capital Xi’an as far as ancient Rome.” – Charles Clover and Lucy Hornby, Financial Times

Chart of the Day

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

Why the Dow Jones Industrial Average got so spooked by the Federal Reserve

MarketWatch/Ben Levisohn/3-20-2018

“That the market isn’t up, let alone up more, could be seen as a surprise given just how far out of its way the Fed went not to upset it. It doesn’t expect rate hikes in 2019, and it also set a level for how much it will let its balance sheet shrink. All good, right?”

USAGOLD note:  So why did the stock market sell-off yesterday on news that should have sent it on a tear higher?  An early take at the link above. . . . .

Posted in Today's top gold news and opinion |

Gold ETFs rise following Fed rate decision

ETF Trends/Ben Hernandez/3-20-2019

“Following the Federal Reserve’s decision to keep rates flat, gold exchange-traded funds (ETFs) like the SPDR Gold Shares (NYSEArca: GLD) and SPDR Gold MiniShares (NYSEArca: GLDM) gained as the dollar fell. GLD gained 0.65 percent while GLDM rose 0.61 percent.”

USAGOLD note:  Not surprisingly, funds and institutions bought gold on the Fed news.

Posted in Today's top gold news and opinion |

Powell signals prolonged Fed pause as inflation lags, risks loom

Bloomberg/Jeanna Smialek and Matthew Boesler/3-20-2019

“It was very dovish,’’ said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC. “It suggests that the Fed has jumped to the conclusion that the weakening we have seen since the start of the year will be more fundamental and more persistent, rather than being temporary crosscurrents.”

USAGOLD note:  Most of the comments in this article fall in line with our own in yesterday’s Afternoon Update.  We see the Fed’s moves yesterday as ultra-dovish.  The only way it could have been more dovish is if the Fed had announced a surprise rate cut or the reintroduction of quantitative easing.  A consistently weaker dollar might be the end result over the weeks and months ahead – a turn of events likely to be received happily at the White House.

Posted in Today's top gold news and opinion |

Trump warns China tariffs could remain for ‘substantial’ time

Financial  Times/Pan Kwan Yuk/3-20-2019

“We’re not talking about removing them, we’re talking about leaving them for a substantial period of time, because we have to make sure that if we do the deal with China that China lives by the deal,” Mr Trump said. “They’ve had a lot of problems living by certain deals.”

USAGOLD note: This news had a cooling effect on markets yesterday afternoon.

Posted in Today's top gold news and opinion |

This might be the dollar disaster bears have been waiting for

Bloomberg/Susanne Barton and Katherine Greifeld/3-20-2019

“Before Wednesday, ‘we were mildly bullish with the intention of flipping as soon as the Fed signaled that it was done tightening through QE and rate hikes,’ said Greg Anderson, global head of foreign-exchange strategy at BMO. ‘The Fed dropped those hints a whole lot faster than we thought.'”

USAGOLD note:  Many in the professional money management business placed bets on a more moderate approach to rates than what the Fed signaled earlier today. What surprised many is the breadth of support for an ultra-dovish policy on the Board of Governors. As TD Securities’ Mark McCormick told Bloomberg at the link above: “The dots are dinging the dollar.”

Posted in Today's top gold news and opinion |

Afternoon Update – Gold takes kindly to ultra-dovish policy maneuvering

(USAGOLD – March 20, 2019) – Gold took kindly to the Fed’s dovish policy maneuvers today finishing at $1314 – up $8 on the day and $14 from its intraday low. Silver also reacted positively to the Fed meeting – up $13¢ at $15.52. In a suggested plan that took the market by surprise, policy-makers revealed they would likely raise rates just once between now and the end of 2020 and then hold them steady in 2021. It also put ending its balance sheet runoff on a firm timeline saying it would stop in September and slow the process down in the interim.

While gold took the projected policy changes as a positive, the Dow had the opposite reaction tracking south on worries that the Fed was reacting to a weakened economy that would affect stock values.  It will be interesting to see how the markets react in the coming weeks to what can only be described as ultra-dovish positioning today on the part of the Powell-led FOMC.

Posted in Today's top gold news and opinion |

Fed sees no rate hikes in 2019, plans to slow balance sheet reduction

Reuters/Howard Schneider and Trevor Hunnicutt/3-20-2019

“In a major shift in its perspective, the Fed also now expects to raise borrowing costs only once more through 2021, and no longer anticipates the need to guard against inflation with restrictive monetary policy.”

USAGOLD note:  The Fed will also slow its monthly balance sheet run-off from $30 billion to $15 billion and end it in September. The announcement it will raise rates only once through 2021 was a surprise that the markets are trying to digest. The Reuters article linked above provides a good overview of the Fed meeting and its aftermath.

Posted in Today's top gold news and opinion |

Short and Sweet

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Two legendary central bankers embrace gold

All is not well with the economy. Growth rates continue to remain stubbornly low in the United States and at recessionary levels in much of the rest of the world.  A recent Gallup Poll found that “Americans’ outlook for the economy has soured in the past two months, with 48% now saying economic conditions are worsening – up from 45% in December and 36% in November.”

In The End of Alchemy (2017), Mervyn King, the former governor of the Bank of England, writes of central banks’ frustration in dealing with the persistently stagnant global economy. “Central banks,” he says, “have thrown everything at their economies, and yet the results have been disappointing, Whatever can be said about the world recovery since the crisis, it has been neither strong, nor sustainable, nor balanced. . . [W]ithout reform of the financial system, another crisis is certain – sooner rather than later.”

“Our problem,” Alan Greenspan once said, “is not recession which is a short-term economic problem. I think you have a very profound long-term problem of economic growth at the time when the Western world, there is a very large migration from being a worker into being a recipient of social benefits as it is called. And this is legally mandated in all of our countries.” The western world, he concludes, is headed to “a state of disaster.”

It is interesting to note that both Greenspan and King, two of the most respected central bankers in modern times, have embraced gold since leaving their respective posts. The former Fed chairman has consistently suggested that gold is “a good place to put money these days given the policies of governments.” The former governor of the Bank of England says that he is “very struck by the fact that over many many years, central banks, governments and individuals have always, despite the protestations of economists, held some gold in their portfolio. . .[W]hen unexpected things happen, particularly when governments rise and fall, then gold is a means of payment that everyone is always prepared to accept. And I think that’s why even central banks have always had a role in their portfolios for gold.”

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

Central banks register largest January increase in gold reserves on record

World Gold Council/March 2019

“Gross purchases of 48 tonnes (t) and gross sales of 13t led to global gold reserves rising by 35 tonnes on a net basis in January, with sizeable increases from 9 central banks. This is the largest January increase in gold reserves in our records (back to 2002) and illustrates the recent strength in gold accumulation. Demand was concentrated amongst emerging market central banks with diversification the key driver in the face of ongoing geopolitical and economic uncertainty.”


Chart courtesy of the World Gold Council/GoldHub


Repost from 3-12-2019

Posted in Today's top gold news and opinion |

Comparing US economic output against the rest of the world

How Much/March 2019

Click to enlarge

“The U.S. economy hit $20.5 trillion in GDP in 2018,” says HowMuch. “What does this number actually mean? Well, GDP stands for “gross domestic product”, or, the total value of goods and services produced by a country in any given year. This means the U.S. produced $20.5 trillion in goods and services over 2018. This is an impressive number in and of itself, seeing as total GDP for the entire world was about $80 trillion in 2017. Yet, what might be more impressive is breaking down GDP by each individual state, and then measuring each state against a foreign nation to see how each state fares in size. What the results show is nothing less than astounding.”


Chart and commentary courtesy of HowMuch.net, March 2019


Repost from 3-14-2019

Posted in Today's top gold news and opinion |

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Posted in Today's top gold news and opinion |

Gold edges tentatively higher; fourth straight up day

(USAGOLD – March 20, 2019) – Gold edged tentatively higher for the fourth straight day after spending a quiet night overseas.  It is up $3 from yesterday’s close at $1309, but up $6 from Asia’s low earlier this morning. Silver is up 3¢ at $15.41.  The fact that gold has traded marginally higher during the week of an FOMC meeting is in itself noteworthy.  Typically it struggles during Fed Week. The fact that it held its own tells us that investors are expecting a dovish result from today’s statement and press conference. That’s not to say that the Fed is incapable of delivering a surprise.

Will Rhind, CEO of Granite Shares ETFs, has a positive outlook on gold. “You’ve had a bit of a V-shaped recovery in the market,” he recently told CNBC, “but [with] gold prices selling off, this could well be a buying opportunity for gold at this point. . .That’s a weaker dollar platform in my mind, one of the key things that helps drive gold prices. So, for me, I think: Look at this price and think about defensive positioning.”  The selling off he mentions came when gold dipped below the $1300 level earlier this month.  Gold is up $25 from those lows.

Quote of the Day
“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – William Strauss and Neil Howe, The Fourth Turning

Chart of the Day

Chart note:  This chart shows the percent change year over year in the volatility index along with the price of gold.  As you can see, past bouts of increased volatility have preceded upward movement in the price of gold.  The last spike in volatility came at the end of last year and it matched in magnitude spikes that occurred during the 2007-2008 credit crisis.

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

Silver demand in India set for 4-year high on farm cash payout

Bloomberg/Swansy Alonso/3-19-2019

“Silver will see a resurgence in demand this year from rural Indians spending cash handouts from the government designed to aid local economies ahead of the general election, according to Metals Focus Ltd.”

USAGOLD note:  Two other factors are driving Indian demand for silver – low international prices and a weakening rupiah, as reported here yesterday.

Posted in Today's top gold news and opinion |

Argentina’s peso, nothing but trouble

Forbes/Steve Hanke/3-16-2019

“While this spike caught most observers off balance, it didn’t surprise me. . . By my measure, Argentina’s annual inflation rate is 100%/yr (see the accompanying chart at link above). That’s nearly double the official rate reported for the end of February.”

USAGOLD note:  Emerging country debt and currency problems stimulate two important sources of physical gold demand.  The first is within the country itself as investors up and down the economic ladder – from private individuals to financial institutions – move to safeguard their assets from currency depreciation and systemic risks.  The second is external to the country as investors elsewhere move to insulate their portfolios against the risks its problems might impose on the rest of the interlocking global banking system.

Posted in Today's top gold news and opinion |

Gold benefitting as central banks de-dollarize

Scrap Register/3-19-2019

“‘Even though USD still accounts for 39.9% of international payments according to SWIFT, its market share has declined, as the global economy has become less U.S. and USD-centric,’ the [Bank of America Merrill Lynch] analysts said. ‘We believe that de-dollarization is an important factor behind the addition of gold to central bank gold reserves.’

USAGOLD note:  We note that de-dollarization is occurring at a time when the greenback is on the rise in in global markets.  One wonders how the process will be affected if the dollar begins to decline as many analysts are forecasting for 2019.

Posted in Today's top gold news and opinion |

Sales of gold and silver should not be taxed

Forbes/Steve Forbes

“When you exchange a $20 bill for two $10 bills, you don’t pay sales tax on the transaction, even though, theoretically, you are “buying” the tens. The notion is utterly preposterous. Yet if you purchase a gold coin that was created by the U.S. Mint and is legally usable for commercial transactions, in some states you have to pay sales tax on that coin.”

USAGOLD note:  It probably goes without saying that we agree with Mr. Forbes assessment and welcome his prominent voice in the effort to end sales and capital gains taxes on gold and silver (money) transactions on a national basis. As it stands, 38 out of the 50 states have some version of a sales tax exemption in place on citizen purchases of gold and silver coins and bullion.  West Virginia joined the group of exempt states just last week.


Repost from 3-14-2019

Posted in Today's top gold news and opinion |

Gold pushes steadily higher in advance of today’s Fed meeting

(USAGOLD – March 19, 2019) – Gold pushed steadily higher overnight in advance of today’s Fed meeting – up $7 at $1310.  Silver is up another 8¢ this morning at $15.42. The advance which began in Asia carried over to European trading and the open in New York.  It’s principal influence remains an anticipated dovish result to the meeting on two fronts – the direction of interest rates and an announcement of a time certain for ending the Fed’s quantitative tightening program. 

In a report that asks if the world is running out of gold,  Germany’s Deutche Welle answers with a quote from CFRA researh analyst Matthew Miller:  “The largest and most prolific reserves have already been found. Gold miners are struggling to grow reserves in line with their production.” John Ing, an analyst at Canada’s Maissons, offers a different take on the situation. “Finding gold is a function of the gold price,” he says. “There is no shortage of gold in the world but just at this price there is a shortage. It’s quite possible that gold will be $2,000 per ounce, you will see a rush of exploration and more deposits being found.” 

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

Chart of the Day

Chart note: This quarterly chart zeroes-in on why the national debt matters to ordinary Americans. Rising interest rates and massive growth in the gross debt will push these numbers much higher – so much so that it will exceed in the near future what the nation spends on national defense. . . .and the higher interest rates grow the greater the problem will become. One would think that like Italy or Greece, at some point, the level of debt and interest payments will affect the national credit rating. Last, please note the acceleration in debt payments over the last twelve months (the last bar represents Q3-2018).

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

Why gold is still the best basis for money

Forbes/Nathan Lewis/3-16-2019

“Why is it that the collective intelligence (let’s be generous) of today’s central bankers, and indeed all the central bankers since 1971, cannot outperform a yellow rock? This probably strikes some as bizarre, but it has always been thus. Way back in 1928, in a book called The Intelligent Woman’s Guide to Socialism and Capitalism, George Bernard Shaw declared: “You have to choose … between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.”

USAGOLD note:  Whether or not gold is the best basis for money may be a moot point.  Whether or not private investors should own it because the money is not gold-backed, on the other hand, remains a vital question.

Posted in Today's top gold news and opinion |

A 42% surge in India’s gold bar imports

Scrap Monster/3-18-2019

“The combined gold bar imports during the initial eleven-month period of the current fiscal year totaled $7,183.02 million. The imports surged higher significantly by 41.80%, upon comparison with the imports that had totaled only $5,065.71 million during the corresponding eleven-month period of the previous fiscal year.”

USAGOLD note:  About a month ago, reports were circulating that investment gold demand would drop in India due to increasing acquisition prices in rupiah terms.  We questioned that assumption saying that the increase seemed small when compared to the concern Indians might have about the future value of their currency.  It turns out we were right on that score. Bullion sales are up 42% over the past eleven months in India as investors move to protect their assets against further depreciation of the rupiah.

Posted in Today's top gold news and opinion |

The Fed’s failures are mounting

Bloomberg/Daniella Martina Booth

“When ’60 Minutes’ reporter Scott Pelley asked Bernanke if the Fed was printing money, his reply was, ‘Well, effectively. And we need to do that, because our economy is very weak, and inflation is very low.’”

USAGOLD note:  A frank admission on the part of the Fed chairman we thought worth passing along for your consideration. Central bankers always believe they can control the inflation they create.  Sometimes they can.  Sometimes they can’t and that is why investors buy gold and silver.


Repost from 3-12-2019

Posted in Today's top gold news and opinion |

When trouble strikes, where should you hide? The case for gold

TheEconomist/Buttonwood

” There is one other destination you might consider, if only because others are starting to think the same way. And that is gold.”

USAGOLD note: Deductive logic, game theory point to gold . . . A well-written thinking man or woman’s approach to the financial markets and gold.


Repost from 2-15-2019

Posted in Today's top gold news and opinion |

Gold edges higher to start Fed Week

(USAGOLD – March 18, 2019) – Gold is off to a positive start on the week trading at $1305.50 and up $3 on the day.  Silver is up 11¢ at $15.38.  With the Federal Reserve Open Market Committee meeting tomorrow and Wednesday, this morning’s upside is something of a victory for the yellow metal in that Fed Week is typically spent trading sideways to down. 

The Wall Street Journal this morning ran an article with the headline “Fed is likely to signal rate boost isn’t near” which summarizes pretty much where Wall Street stands on the meeting. Adding to that assessment, Wall Street Journal Fed reporter Nick Timiraos offered this insight in Saturday’s edition:  “New York Fed President John Williams, Fed governor Lael Brainard and Mr. Clarida, who are often in sync with Fed Chairman Jerome Powell, have all made recent statements compatible with this assessment by underscoring the need for a very cautious approach right now.” In doing so, Timiraos somewhat surprisingly enters Powell’s name on a list of Fed players known for their dovish sentiments.

Quote of the Day
“I remember being told many years ago on a South African game reserve that the buffalo was the most dangerous of the big five game animals. In large part, this is because of the complacency shown towards them relative to the other, more obviously dangerous big five game animals (ie the lion, leopard, rhino and elephant). It’s also a fact that unlike the other big five, the buffalo gives no warning of an imminent charge (see link). It’s complacency that gets you killed, and the same goes for investors with the macro-risks. We all know what the big macro-imbalances are out there, caused by years of loose money, but investors continue to ignore them at their peril.” – Albert Edwards, SocGen

Chart of the Day

Chart courtesy of HowMuch.net

Chart note: As you can see, after the United States and China, GDP for the rest of the nation states falls off quickly. Japan is a distant third and Germany an even more distant fourth. The European Union as a whole even without the United Kingdom, however, would replace China as number two if counted as a whole. This visualization drives home what’s at stake in the trade war between the United States and China. It involves the two largest economies in the world by far and nearly 40% of the global economy.

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