Gold remains on straight and narrow, second successive ‘no-change’ day

(USAGOLD – April 18, 2018) – Gold – at $1274 per ounce – remains on the straight and narrow this morning posting its second successive no-change day thus far and looking about for incentive to move in one direction or the other.  Silver is down 1¢ at $14.97.  As reported yesterday, Thursday’s sell-off appeared related to Venezuela’s liquidation of $400 million worth of its gold reserves.  As for the Monday’s follow-through decline, Commerzbank attributes it to “technical selling after the price dropped below the technically important 100-day moving average . . .We do not understand why the gold price should be weak given the very loose monetary policy pursued by many Western central banks – apparently the ECB [European Central Bank] is even considering price-level targeting.” [Scrap Register, 4-16-2019] We agree that stimulus and response in the gold market seem out of kilter at the moment.

Quote of the Day
“Were Keynes alive today, he would likely be arguing along with German Chancellor Angela Merkel for more monetary discipline and a return to a more balanced international system. No doubt, however, his neo-Keynesian acolytes would be dismissing his concerns as hopelessly outdated and reactionary. Keynes was an economic theorist, but he was also a clear-eyed market analyst, and a passionate and committed speculator for his own account and for Cambridge University. If he took in today’s economic vista of near-zero interest rates and quantitative easing, it is clear that he would be buying gold hand over fist—regardless of what his disciples might think.” – Richard Hurowitz, Octavian Report (in a Wall Street Journal editorial published September 2015)

Chart of the Day

Chart note: This quarterly chart zeroes-in on why the national debt matters. Elevated interest rates and massive growth in the gross debt will push federal government interest expense much higher – so much so that it could exceed in the near future what the nation spends on national defense. 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 Q4-2018).

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